rf 

:ROSS 


MILITANT  LIFE  INSURANCE 


AND 


OTHER  ADDRESSES 


BY 

DARWIN  P.  KINGSLEY 

PRESIDENT  OP  THE 

NEW-YORK  LIFE  INSURANCE  COMPANY 


NEW  YORK 

PUBLISHED  BY  THE  COMPANY 
1911 


CONTENTS 


Page 

Militant  Life  Insurance 11 

Life  Insurance  and  Life 28 

Life  Insurance  and  the  American  Business  Man 35 

Our  Second  Great  Enemy 47 

Address  of  Welcome 60 

How  Strong  Is  the  New- York  Life? 65 

The  Driving  Power  of  Life  Insurance 70 

Remarks — On  Being  Chosen  President 85 

Letter  to  Policy-holders 91 

Some  Lessons  for  Policy-holders 100 

The  Future  of  American  Life  Insurance 114 

Insurance:     Trans-Mississippi  Address,  1907 151 

New  York  State  and  Life  Insurance  Legislation 173 

Life  Insurance  in  Its  Relations  to  Sociology 197 

Remarks;  Paris,  1908 217 

The  Relation  of  the  State  to  Life  Insurance 227 

Insurance  Supervision  and  National  Ideals 250 

Life  Insurance  and  the  Moral  Obligation  of  Employers ...  280 

Life  Insurance  and  Our  Dual  Citizenship 290 

Life  Insurance  and  the  Man 313 

Life  Insurance — The  Discoverer  and  the  Lawgiver 323 

Life  Insurance  and  Commercial  Banking 333 

Life  Insurance  and  Justice 349 

Centennial  Oration 367 

Henry  A.  P.  Torrey — A  Tribute 397 

Puritanism:  A  Living  Force 401 

The  Land  We  Live  In 412 

The  Forefathers  and  the  American  Idea 420 

Matthew  Henry  Buckham — An  Appreciation 431 

Charge  to  the  President  of  the  University  of  Vermont 438 


DEDICATED 

TO  THE  BLESSED  MEMORY  OF 

JOHN  A.  McCALL 

Blessed  are  ye  when  men  shall  hate  you,  and 
when  they  shall  separate  you  from  their  company, 
and  shall  reproach  you,  and  cast  out  your  name 
as  evil  *  *  *  /  for  in  the  like  manner  did 
their  fathers  unto  the  prophets. 

-Luke  VI,  22,  23. 


FOREWORD 


To  My  Business  Associates: 

A  man's  business  is  whatever  keeps  him  busy. 
Whatever  keeps  a  man  busy  is  the  most  important  thing 
in  his  life.  The  theory  of  the  "business  talks"  included 
in  this  volume  is  that  labor  is  the  first  duty  of  man; 
that  labor  should  be  done  with  enthusiasm ;  that  every 
sort  of  labor  is  important;  that  labor  done  honestly, 
earnestly  and  intelligently,  so  nearly  discharges  man's 
duty  to  all  that  he  knows  about  life  that  religion  is  not 
very  far  off.  If  a  man  seeks  truth  as  he  labors,  if  he 
loves  the  beautiful  and  contributes  to  its  creation  in 
the  performance  of  his  daily  tasks,  if  he  is  possessed  of 
sufficient  race  consciousness  to  understand  that  his  obli- 
gations to  others  are  imperative  and  that  both  the  quan- 
tity and  the  quality  of  his  work  enter  into  the  liquida- 
tion of  those  obligations,  he  is  a  religious  man,— a 
deeply  religious  man. 

Every  man  has  a  pulpit,— his  daily  task;  but  only 
those  who  work  with  high  enthusiasm  are  preachers. 
Nylic  men  are  Ministers,  not  of  Grace  but  of  Self- 
Respect.  Your  sermons  are  printed  in  the  growing  self- 
respect  of  men.  They  are  bound  up  in  the  great  store- 
house of  social  power  called  the  New- York  Life. 

My  daily  task  for  five  years  has  been  a  heavy  one. 
What  sermons,  if  any,  I  have  preached  from  that 
pulpit,  I  may  not  say;  but,  incidentally,  I  have  now 
and  then  assumed  the  role  of  the  real  preacher.  The 
product  is  this  volume. 

D.  P.  K. 

346  Broadway,  New  York. 
December,  1911. 


MILITANT  LIFE  INSURANCE 


DELIVERED  BEFORE  THE  NATIONAL  ASSOCIATION  OF  LIFE  UNDERWRITERS, 
HARTFORD,  CONNECTICUT,  SEPTEMBER  19,  1905. 


SEEMS  to  be  a  universal  law  that 
whatever  survives,  whatever  grows, 
whatever  becomes  useful,  must  fight. 

I  can  recall  no  great  reform,  no 
great  revolution,  political  or  intellec- 
tual, that  has  not  been  attended  with  a 
severe  struggle.  This  has  been  especi- 
ally true  in  the  establishment  of  moral 
and  religious  ideas.  Every  great  re- 
ligion has  had  to  fight,  not  merely  with  pen  and  voice, 
but  with  the  sword;  and,  generally  speaking,  the  men  be- 
hind great  moral  and  religious  movements  have  not  only 
been  obliged  to  fight,  but  have  been  willing  to  fight,  have 
even  sought  conflict. 

Once  seized  with  genuine  religious  or  moral  convic- 
tion, man  is  apt  to  become  a  zealot.  He  wants  to  preach ; 
and  from  preaching  he  wants  to  fight.  He  is  moved  to 
force  his  ideas  onto  other  people.  For  example:  once  pos- 
sessed fully  of  a  belief  in  hell  fire  and  the  sufficiency  of 
the  Christian  plan  of  salvation,  how  easy  to  reach  the 


11 


12  Militant  Life  Insurance 

conclusion  that,  in  order  to  save  an  otherwise  lost  soul, 
almost  anything  was  justifiable.  The  horrors  of  the  Inqui- 
sition, after  all,  sprang  from  a  deep  sense  of  duty.  We 
can  think  of  such  men  as  being  wrong;  we  believe  they 
were  frequently  cruel;  some  of  their  acts  in  the  light  of 
later  knowledge  seem  wholly  infamous ;  but  it  is  never  pos- 
sible to  think  of  them  as  indifferent.  In  no  act  of  their 
lives,  in  none  of  their  relations  to  the  world,  are  they 
presented  as  hesitant  or  doubtful  or  questioning.  They 
are  always  in  the  attitude  of  conquest.  Possessed  of  this 
ecstacy,  every  impulse  of  life  drives  the  believer  to  ex- 
haust himself  in  carrying  his  faith  to  the  uttermost  parts 
of  the  earth. 

It  is  difficult  for  us  to  think  of  these  forces  as  being 
operative  in  our  day,  and  in  our  country.  When  search- 
ing for  examples  of  men  so  moved,  we  naturally  look  in 
the  early  centuries,  when  men  dared  the  unknown  in 
order  to  establish  their  faith,  or  in  a  later  period,  when 
Europe  was  torn  with  religious  strife,  and  the  bloodiest 
and  cruellest  wars  in  all  history  were  fought.  Some  of 
us  may  possibly  let  our  minds  run  as  near  to  the  present 
as  the  time  when  Charles  Darwin  advanced  his  theory  of 
evolution.  I  don't  need  to  recall  here  the  bitterness  with 
which  he  was  denounced.  But  to  bring  our  quest  up  to 
the  present  hour,  to  realize  that  the  same  intense  convic- 
tion which  moved  the  early  navigators  and  later  reformers 
and  stirred  the  Church  still  lives  in  some  form,  and  still 
moves  the  world,  is  difficult. 

The  tendency  indeed  is  strongly  against  any  such  con- 
clusion. We  are  rather  disposed  to  believe  that  the 
giants  are  all  dead.  Under  the  inspiration  of  a  daily 
press,  which,  whatever  its  faults,  is  certainly  very  much 
alive,  we  are  rather  disposed  to  conclude  that  the  only 
real  and  living  things  are  official  corruption,  private 
scandals,  betrayal  of  trusts,  suspicions,  bitter  feuds,  and 


Militant  Life  Insurance  13 

jealousy.  That  real  conviction  and  enthusiasm,  devotion 
and  self  sacrifice  survive,  outside  of  fugitive  and  indi- 
vidual instances,  does  not  readily  occur  to  any  of  us. 

The  great  motive  power  of  modern  life,  nevertheless, 
is  really  made  up  of  these  very  forces.  Their  aim  now  is 
not  glory,  nor  the  triumph  of  any  particular  theory  about 
the  hereafter,  nor  money,  as  we  are  taught  to  think,  nor 
power,  as  we  easily  believe.  The  contest  is  not  to  find  a 
new  world  beyond  the  Atlantic,  nor  to  convert  the  heathen, 
at  least  not  the  old-fashioned  type  of  heathen. 

Deeper  than  any  of  these  dreams  and  ambitions,  in 
the  colossal  enterprises  of  our  day,  lies  the  enthusiastic 
conviction  that  through  modern  methods  and  by  the  hands 
of  the  giants  who  wield  them,  we  are  surely  passing  up 
into  a  juster  and  a  sweeter  life. 

In  the  thick  of  these  plans  and  ambitions  and  struggles, 
all  of  which  seek  in  some  form  to  conserve  and  advance 
human  life,  is  life  insurance.  Above  every  other  form  of 
business  it  awakens  the  fighting  impulse  in  the  soul  of  the 
true  believer.  It  is  a  conviction  first  and  then  a  business. 
This  explains  why  with  all  its  modernity  life  insurance  so 
strongly  suggests  the  atmosphere  of  an  earlier  time.  The 
missionary  spirit  runs  through  every  line  of  its  vigorous 
literature.  The  preacher  takes  his  text  with  the  opening 
of  every  rate-book.  The  crusader  survives  in  every  great 
agency  leader  who  marshals  his  forces  against  the  citadels 
of  indifference  and  ignorance.  And  at  the  same  time, 
and  just  as  unmistakably,  the  spirit  of  orderly  government, 
of  peace,  of  industry,  of  integrity,  and  of  world- wide 
trade  guides  every  finance  committee. 

While  it  would  seem  that  life  insurance,  and  especi- 
ally American  life  insurance,  must  from  its  very  consti- 
tution preach,  must  organize  crusades,  yet  we  find  that 
it  does  so  variously.  Some  companies  preach  almost  not 
at  all,  indeed  one  or  two  employ  no  preachers  and  take 


14  Militant  Life  Insurance 

much  satisfaction  therein.  Others  preach  only  to  their 
immediate  neighbors  and  never  venture  into  fields  on  which 
shines  a  different  sun  or  in  which  a  strange  speech  is  used. 
Still  others  find  no  limit  to  the  extent  of  that  weakness 
or  incompleteness  in  human  life  and  society  with  which 
life  insurance  deals ;  they  stop  at  no  parallel  of  latitude  or 
longitude.  The  cry  for  help  which  life  insurance  seeks  to 
answer  does  not  cease  at  state  borders  nor  with  the  lines 
that  delimit  nations;  it  finds  a  way  to  express  its  need 
in  every  tongue  and  invariably  asks  for  the  same  relief. 
The  cry  comes  up  from  all  the  earth.  It  is  a  call  that 
touches  the  heart  and  inflames  the  imagination.  It  offers 
not  a  golden  reward  for  a  short  cut  to  India,  but  the  im- 
measurable riches  that  belong  to  all  those  who  have  added 
something  to  the  sum  of  human  comfort.  It  comes  too 
from  all  sorts  and  conditions  of  men;  not  alone  from  the 
sound  and  strong;  but  from  millions  who  have  their  full 
measure  of  responsibility  with  less  than  a  full  measure  of 
health  and  strength. 

American  life  insurance  has  struggled  mightily  to 
answer  these  calls  for  help.  The  attempt  has  been  splen- 
did, the  results  glorious;  although  the  attempt  is  not 
without  critics,  and  the  results  are  sometimes  maliciously 
misstated  and  misconstrued.  The  answer  to  this  call  of 
society  has  been  attempted  in  no  spirit  of  adventure,  with 
no  desire  for  conquest ;  but  seriously,  soberly.  If  Energy 
has  been  at  our  right  hand,  Responsibility  has  walked 
hard  by. 

Let  us  consider  what  life  insurance  proposes  to  do; 
how  it  does  it ;  what  its  moral  responsibility  is.  We  may 
thus  be  able  better  to  understand  the  vigor  and  furious 
energy  that  characterizes  the  American  life  insurance 
man. 

Life  insurance  is,  first  of  all,  based  on  good  morality,  not 
simply  abstract  morality,  or  individual  morality,  but  mo- 


Militant  Life  Insurance  15 

rality  as  a  question  of  statesmanship,  as  a  matter  of  prac- 
tical administration  in  human  affairs.  From  the  moment 
when  the  soliciting  agent  opens  his  rate-book  until  the  hour 
when  the  contract,  made  through  his  instrumentality,  ceases 
to  exist,  life  insurance  fixes  for  itself  the  very  highest  stand- 
ard of  moral  as  well  as  legal  responsibility.  It  presents 
itself  as  a  haven,  a  city  of  refuge,  a  vast,  half  impersonal 
organization  which  professes  to  lift  the  individual  some- 
what out  of  the  current  hazards  of  existence,  and  offers 
to  solve  some  of  the  pressing  and  cruel  problems  of  fate. 
It  is  not  an  overstatement  to  say  that,  primarily,  life 
insurance  approaches  the  individual  much  as  the  confes- 
sional does.  It  asks  the  public  to  come,  to  give  over  into 
its  keeping,  almost  without  question,  not  only  hopes,  and 
plans,  and  responsibilities,  but  money.  In  this  civiliza- 
tion, money  has  come  to  mean  almost  life  itself.  It  means 
the  product  of  daily  toil,  labor  with  the  hands  or  brains. 
In  an  age  when  there  is  less  and  less  belief,  in  a  definite 
way,  in  the  overshadowing  care  of  Providence,  and  more 
and  more  conviction  that  a  man  must  take  care  of  himself 
and  his  own,  money,  that  the  poets  sneer  at  and  that  the 
philosophers  rail  at,  has  come  to  be  not  only  a  center  of 
power,  but  in  the  hands  of  modern  co-operation  almost  the 
center  of  moral  as  well  as  material  power.  Then,  adding 
an  element  of  mystery  as  well  as  morality,  life  insurance 
agrees  to  do  for  those  who  pay  over  their  money  into 
its  keeping,  things  which  no  man  alone  can  do  for  himself. 
In  order  to  carry  out  a  pledge  which  when  made 
seemed  almost  to  assume  the  possession  of  more  than 
human  power,  life  insurance  adopts  methods  which  are 
neither  mysterious,  nor  magical,  nor  unknowable,  but 
entirely  material  and  purely  human.  It  necessarily 
plunges  at  once  into  the  very  center  of  modern  activity 
and  modern  life.  Its  primary  promise,  while  seemingly 
very  wonderful,  is  simple  enough,  but  before  that  promise 


16  Militant  Life  Insurance 

is  made  good,  life  insurance  has  to  touch  and  handle  and 
know  and  master  business  and  law  and  medicine  and  the 
most  abstract  reaches  of  the  most  exact  of  the  exact  sci- 
ences; it  must  know  and  be  able  to  measure  habitat  and 
occupation  and  all  the  forces  and  facts  that  influence  life, 
since  life  is  its  problem. 

The  moral  responsibility  of  life  insurance,  considering 
what  it  takes  from  the  people  and  what  it  teaches  them  to 
expect,  comes  very  close  to  something  superhuman  in  its 
quality.  The  material  responsibility  of  life  insurance  is 
so  built  into  the  very  fabric  of  all  commercial  faith  that 
even  a  suspicion  of  its  soundness  cannot  be  tolerated. 

We  have  then  in  this  business  as  we  interpret  and 
practice  it,  an  unprecedented  combination  of  the  moral 
and  the  material,  of  conviction  and  reason,  of  preaching 
and  mathematics,  of  the  zeal  of  the  fanatic  and  the  dis- 
passion  of  a  business  contract.  We  have  the  interest  of 
the  unit  and  the  interest  of  the  million,  the  need  of  a 
village  and  the  hopes  of  a  nation. 

The  men  who  gave  American  life  insurance  its  great 
primary  impulse,  the  men  who  have  led  in  its  superb 
later  development,  comprehended  early  the  quality  of  its 
moral  responsibility,  the  possibilities  of  its  business  rami- 
fications, and  especially  the  service  it  is  calculated  to  render 
to  men.  Small  wonder  that  all  these  have  had  the  spirit 
of  the  crusader. 

Life  insurance  was  altogether  calculated  to  appeal 
powerfully  to  the  genius  of  our  people.  Nowhere  else  in 
the  world  has  all  that  is  involved  in  this  semi-religious 
and  semi-business  plan  been  so  comprehended  as  in  the 
United  States  of  America ;  nowhere  else  has  it  so  reached 
the  consciences  of  men;  nowhere  else  has  it  touched  the 
moral  instinct,  the  nerve  that  leads  to  conviction  and  to 
action  as  here;  nowhere  else  has  sprung  up  an  army  of 
men  full  of  this  militant  spirit,  full  of  that  flaming  belief 


Militant  Life  Insurance  17 

in  a  mission,  which  has  never  been  satisfied  until  it  has 
crossed  the  sea;  and  this  our  business  has  already  done 
and  in  a  new  world  found  within  the  old  world,  and  in  a 
new  way,  and  for  a  new  purpose,  is  doing  the  very  things 
that  were  done  by  our  forebears  hundreds  of  years  ago, 
operating  under  an  identical  impulse. 

We  have  not  shut  our  ears  to  the  cry  of  all  except  our 
own  or  a  part  of  our  own  people.  We  have  believed  that 
people  on  the  Gulf  of  Mexico  and  in  Texas  not  only  needed 
life  insurance  as  badly  as  the  people  in  New  England, 
but  were  as  legitimately  entitled  to  it.  We  have  believed 
the  same  of  Mexico  and  Canada,  of  France  and  Russia. 
We  have  adopted  with  a  new  fervor  and  significance  the 
old  proverb:  "Nothing  human  is  foreign  to  us." 

That  this  should  be  our  attitude  is  not  strange.  We 
have  a  composite  blood,  and  in  it  ready  for  action  and 
seeking  opportunity  is  something  which  is  the  legitimate 
offspring  of  those  explorers  and  adventurers  and  lovers 
of  humanity  who  found  the  continent  and  built  the  nation. 
The  line  of  descent  is  unbroken.  It  goes  back  to  Cabot  and 
Cartier  and  Drake  and  Columbus,  even  to  the  Vikings. 
It  definitely  reasserted  itself  in  1783  when  the  Colonies 
took  the  Ohio  Valley  from  the  quarreling  nations  of 
Europe ;  it  was  again  in  evidence  in  1803  when  Louisiana 
was  purchased;  it  explains  that  restless  and  not  always 
too  just  spirit  which  finally  swept  over  the  continent 
to  the  Pacific;  it  purchased  Alaska,  and  acquired  the 
Philippines ;  it  will  construct  the  Isthmian  Canal ;  indeed, 
the  Monroe  Doctrine  itself  is  only  a  general  expression 
of  the  same  instinct. 

A  few  weeks  ago  I  stood  in  an  old  church  in  Brittany 
and  read  an  inscription  on  a  tablet  let  into  the  floor 
before  the  great  altar.  It  commemorated  the  fact  that 
almost  four  hundred  years  ago,  Jacques  Cartier  had  knelt 
there  to  receive  the  blessing  of  the  Church  before  sailing 


18  Militant  Life  Insurance 

on  the  voyage  which  added  the  St.  Lawrence  to  the 
dominions  of  France  and  opened  up  a  new  empire  to 
Christianity  and  civilization.  I  then  remembered  that  from 
near  that  same  old;  walled  city  had  also  come  La  Salle, 
Marquette  and  Champlain,  and  my  thoughts  went  quickly 
over  what  these  names  mean  in  the  story  of  the  conquest 
of  the  Ohio,  the  Mississippi,  and  that  vast  country  to  the 
north.  I  tried  to  understand  the  point  of  view  of  these 
men,  to  comprehend  their  zeal  for  king  and  church,  to 
appreciate  more  fully  the  ecstasy  that  swept  them  not 
merely  out  of  obscurity  into  immortality,  but  into  that 
current  of  human  feeling  which  knows  no  race  or  country, 
but  labors  consciously  for  mankind  as  a  whole  and  dreams 
of  its  apotheosis. 

The  situation  gave  me  a  new  comprehension  of  the 
view  and  purpose  of  our  business.  I  was  on  a  voyage  of 
discovery.  I  represented  a  phase  of  modern  business 
which  is  so  shot  through  with  moral  ecstasy  that  it  has 
turned  back  upon  the  path  of  humanity,  and  full  of  zeal, 
energy,  and  profound  human  sympathy,  has  taken  this 
plan  for  the  redemption  of  human  life,  not  merely  to 
Brittany  but  all  over  Europe  and  to  all  the  civilized 
world. 

American  life  insurance  has  made  voyages  of  dis- 
covery,— voyages  scientific,  voyages  geographic.  It  has 
gone  to  foreign  lands  and  faced  and  fought  the  preju-. 
dice  of  race  and  that  international  fear  which  is  too  often 
the  hope  of  statesmen  and  the  prop  of  kings.  It  has  gone 
carefully  and  surely  out  into  that  terra  incognita  called 
sub-standard  lives,  and  with  skill  as  well  as  courage  has 
brought  under  its  beneficent  rule  a  world  as  new  and  as 
savage  as  America  was  four  centuries  ago. 

It  is  the  fashion,  I  know  in  these  days,  to  decry  the 
great  extent  of  American  life  insurance,  to  point  to  its 
size  and  success  as  in  some  way  a  menace  and  a  danger. 


Militant  Life  Insurance  19 

As  a  matter  of  fact,  life  insurance  has  barely  kept  pace 
with  other  branches  of  modern  business ;  it  is  not  singular 
in  its  enormous  development. 

Let  me  give  you  some  instructive  comparisons : 

The  assets  of  the  life  companies  reporting  to  New  York 
State  doubled  between  the  close  of  1896  and  the  close  of 
1904.  They  sprang  from  $1,228,000,000  to  $2,454,000,000. 
Insurance  in  force  went  from  $5,000,000,000  to 
$10,000,000,000. 

At  the  close  of  the  Spanish  War,  the  total  national 
bank  circulation  was  $240,000,000,  in  seven  years  this 
has  expanded  110%.  In  the  same  time,  the  resources  of 
national  banks  have  increased  from  $4,000,000,000  to 
$7,300,000,000.  The  resources  of  other  banks  increased 
from  $4,500,000,000  to  $9,000,000,000 ;  while  the  cash  hold- 
ings of  all  banks  increased  during  that  time  $570,000,000. 

In  the  eight  years  from  1896  to  1904: 

Dividends  by  railroads  went  from  $81,000,000  to 
$190,000,000. 

Earnings  of  national  banks  went  from  $50,000,000  to 
$113,000,000  annually. 

The  annual  transactions  of  the  New  York  Clearing- 
House  increased  from  $29,000,000,000  to  $60,000,000,000. 

Exports  of  mining  products  doubled. 

The  revenues  of  the  United  States  increased  over  60%. 

Immigration  increased  over  150%. 

We  have  lived  in  a  world  and  a  time  of  enormous 
opportunity  and  intense  activity. 

In  every  business  and  profession  there  have  been  men 
oblivious  to  all  this.  They  have  not  seen  the  opportunity, 
they  misunderstand  and  fear  the  enthusiastic  energy  of 
others.  Few  of  them  ever  carried  a  rate-book ;  none  ever 
felt  in  any  profession  or  business  the  moral  quickening 
which  makes  the  true  life  insurance  man  and  the  twentieth 
century  citizen. 


20  Militant  Life  Insurance 

Some  cry  out  against  the  expanding  power  of  our 
country.  Some  see  in  our  increasing  manufactures,  in 
our  increasing  exports,  in  our  internal  commerce  which 
surpasses  the  trade  of  all  Europe,  a  menace  and  a  danger. 
Some  join  the  insane  cry  against  corporations  and  the 
spirit  of  co-operation  which  tends  to  move  men  in  great 
masses.  Some  life  insurance  men  cry  out  against  life  in- 
surance if  it  isn't  done  in  their  way. 

I  chose  my  theme  to-day  with  a  purpose.  It  seemed 
to  me  quite  time  that  something  should  be  said  as  against 
the  insane  chatter  of  the  hour.  I  am  not  a  member  of 
this  Association,  nor  of  any  of  its  constituent  organizations. 
It  is  possible,  therefore,  for  me  to  say  what  a  member 
might  not  be  willing  or  able  to  say. 

Through  a  series  of  events,  which  I  do  not  need  to 
recite  here,  militant  American  life  insurance  and  its  man- 
agement are  now  on  trial. 

Men  have  been  shocked  and  justly  alarmed  by  the 
conditions  developed  in  a  vigorous,  successful  and  repre- 
sentative American  company. 

I  do  not  apologize  for  anything  done  nor  defend  any 
person  involved  when  I  say  that  there  is  no  more  reason 
to  conclude  that  life  insurance  is  unsound  because  of  these 
revelations,  than  there  was  to  conclude  that  all  the  national 
banks  were  rotten  because  a  Milwaukee  bank  was  lately 
looted  by  its  President.  This  and  all  such  incidents  will 
pass.  They  are  a  part  of  the  history  of  human  weakness. 
Life  insurance  has  deadlier  enemies,— deadlier  because 
under  cover,  because  lodged  in  our  own  household. 

Our  worst  enemies  are, —  that  type  of  life  insurance 
man  and  that  type  of  life  insurance  company,  which  have 
utterly  failed  to  be  seized  with  this  conviction,  this 
ecstasy,  this  moral  force  which  invariably  takes  posses- 
sion of  the  man  who  properly  comprehends  what  life 
insurance  is,  and  generally  actuates  the  management  of 


Militant  Life  Insurance  21 

a  company  when  that  management  is  abreast  of  modern 
opportunity  and  comprehends  what  life  insurance  really 
means. 

This  moral  failure  finds  its  perfect  fruition  in  a  certain 
style  of  agent  not  infrequently  found  in  the  service  of 
reputable  and  useful  and  successful  companies.  Sometimes 
we  can  trace  his  shameless  methods  close  to  the  Home 
Office,  but  almost  no  office  is  willing  openly  to  admit  fel- 
lowship with  him. 

I  do  not  mean  the  common  plunger  who  takes  honest 
policies  and  lies  about  them.  He  is  bad  enough.  But  he 
really  does  only  a  sentimental  damage.  He  may  disap- 
point some  man  to  whose  avarice  he  has  appealed,  leading 
him  to  expect  an  advantage  over  some  one  else.  He 
offends  in  selling  dishonestly  an  honest  article.  He  makes 
a  scandal  and  injures  the  business,  but  he  really  does  no 
definite,  direct  wrong.  I  don't  mean  that  sort. 

I  mean  that  parasite,  that  pirate,  that  man  whose 
victim  is  the  citizen  already  honestly  insured  by  some 
hard-working  agent.  The  uninsured  world  does  not 
attract  this  style  of  agent;  the  real  purpose  of  life  insur- 
ance is  beyond  his  comprehension.  He  can  work  only  by 
destruction.  Having  located  a  man  already  insured,  he 
opens  his  campaign.  He  begins  generally  with  a  letter. 
The  letter  is  cunningly  drafted  to  express  great  solicitude 
for  the  man's  welfare.  If  an  interview  is  had,  you  know 
what  follows.  By  lying  ratios,  by  innuendo,  by  scandal- 
ous suggestion,  he  tears  in  pieces  that  man's  faith  in  life 
insurance.  Out  of  the  wreck  he  may  emerge  with  a 
policy  in  his  own  company  and  he  may  not.  But  he  has 
committed  the  act  of  Tarquin.  He  has  debauched  the 
business. 

Such  enemies  do  not  pass.  They  are  not  a  part  of  the 
history  of  human  weakness.  They  have  written  many  pages 
in  the  story  of  human  malice  and  human  littleness.  They 


22  Militant  Life  Insurance 

correct  nothing;  they  purify  nothing;  they  create  nothing. 
They  are  copperheads,  sure  sooner  or  later  to  be  crushed 
under  the  heel  of  advancing  society. 

Management  without  moral  ecstasy,  without  desire  to 
preach,  with  no  fighting  impulse,  does  not  always  breed  and 
harbor  this  venomous  type ;  sometimes  it  produces  what  may 
be  called  the  ecstasy  of  littleness,  the  serenity  of  unconscious 
failure. 

Let  me  illustrate: 

There  is  an  excellent  old  company  in  London.  It  has 
been  doing  business  for  a  hundred  and  fifty  years.  It  has 
dwelt  at  the  very  center  of  opportunity.  It  is  not  only  in 
London,  but  in  the  heart  of  London.  It  is  eminently  respect- 
able, and  always  referred  to  by  the  enemies  I  have  in  mind, 
as  an  example  of  what  a  life  insurance  company  ought  to 
be.  It  has  lived  through  a  century  and  a-half,  and 
seen  the  growth  of  the  British  Empire  during  that  time. 
For  nearly  seventy  years  it  has  advanced  backwards  like  a 
crab.  It  has  managed  to  get  together  about  $25,000,000  in 
assets.  It  has  in  hand  at  the  end  of  more  than  a  hundred 
years  less  than  two-thirds  as  much,  in  the  interest  of  the 
widow  and  orphan,  as  any  one  of  three  American  life  insur- 
ance companies  accumulated  in  the  year  1904.  If  there  is 
anywhere  a  more  striking  example  of  wasted  opportunity, 
total  incapacity,  and  utter  failure  to  comprehend  what  its 
own  mission  in  the  world  has  been,  I  don't  know  it.  And 
yet,  marvelous  picture !  this  company  is  so  possessed  by  its 
own  conceit,  so  totally  blind  to  what  it  has  failed  to  do, 
that  it  not  infrequently  begs  the  public  to  avoid  confusing 
it  with  an  American  company  of  similar  name,  on  the 
theory  that  it  may  lose  caste  thereby.  I  stand  here  to  say, 
that  with  all  the  scandals,  with  all  the  mistakes,  with  all 
the  maladministration  in  the  Equitable  of  New  York,  almost 
any  single  year  in  the  history  of  that  Society  has  contained 
more  real  effort  and  more  real  achievement  than  everything 


Militant  Life  Insurance  23 

that  has  been  done  by  the  Equitable  of  London  during  its 
entire  existence. 

This  failure  to  comprehend  opportunity  finds  its  largest 
expression  here,  as  well  as  in  England,  in  companies  which 
have  either  shrunk  or  grown  very  slowly  during  the  period 
since  our  Civil  War.  This  period  has  perhaps  been  richer 
in  opportunities  and  results,  than  have  any  two  previous 
centuries  in  all  human  history.  Yet  such  has  been  the  view- 
point of  some  companies  and  such  has  been  their  manage- 
ment that  they  have  shriveled  up  as  the  world  grew  larger. 
As  they  have  shrunk  they  have  complained:  as  they  have 
failed  they  have  cried  out  against  success.  The  voice  of  all 
such  is  very  loud  in  the  land  just  now. 

If  the  world  generally  had  followed  the  example  of 
British  life  insurance  during  the  nineteenth  century  and  the 
example  of  a  few  American  companies  during  the  last  half 
century,  England  would  now  be  a  second-rate  power;  Ger- 
many would  be  made  up  of  impotent,  quarreling  states ;  the 
United  States  would  never  have  gone  west  of  the  Mississippi 
River;  and  the  Japanese  would  be  using  bows  and  arrows. 

In  essentials,  such  as  tables  of  mortality,  rates  of  in- 
terest, policy  conditions,  rates  of  premium,  and  returns  to 
the  insured,  American  companies  are,  after  all,  very  close 
to  each  other.  They  differ  most,  it  seems  to  me,  in  what 
may  be  called  their  spirituality.  They  may  be  classified  un- 
der two  heads :  the  militant  and  the  non-militant.  The  first 
have  gone  afield.  They  have  flourished  mightily.  The  three 
most  striking  examples  of  this  class  have  added  to  the  ranks 
of  the  insured  within  ten  years  1,000,000  people.  What 
they  did  in  ten  years  it  would  take  the  Equitable  of  London 
almost  5,000  years  to  accomplish  at  its  present  rate  of 
growth.  Or,  to  be  specific,  the  New- York  Life  insured 
more  people— ten  to  one— in  1904  than  this  fine,  old  London 
company  ever  had  on  its  books  at  one  time ;  the  New-York 


V 

24  Militant  Life  Insurance 

Life  insured  more  people  in  1904  than  the  old  Equitable 
will  insure,  with  its  present  activity,  in  six  hundred  years. 

Mind  you,  I  admire  the  splendid  fidelity  that  distin- 
guishes the  history  of  this  ancient  company.  I  commend 
its  integrity  and  the  quality  of  what  it  has  done ;  but,  when 
attacks  are  made  by  such  companies  in  England  or  at  home 
upon  other  companies  whose  fidelity  is  as  fine  as  theirs  but 
whose  ideals  are  different,  one  may  be  pardoned  for  using 
the  full  force  of  the  retort  courteous. 

My  plea  is  that  there  is  room  for  all,  and  need  of  all. 

There  is  room  for  those  who  stay  at  home  and  those 
who  cross  the  sea.  There  is  room  for  the  big  company  and 
room  for  the  small  company;  those  who  write  much  and 
those  who  write  less;  those  who  push  and  those  who  wait; 
those  who  defer  payment  of  dividends  and  those  who  dis- 
tribute dividends  annually.  There  is  need  of  all  because  all 
have  a  powerful,  a  common  enemy.  I  do  not  object  to  that 
sharpening  of  wits  and  betterment  of  methods  which  result 
from  honest  competition;  all  life  insurance  men  welcome 
that.  But,  with  you,  I  cry  out  against  the  company  whose 
literature  is  full  of  slanders,  whose  words  breathe  sus- 
picion into  the  public  ear,  whose  agents  raid  and  rob 
and  rape. 

Insurance  written  by  any  company  represented  here  is 
a  distinct  gain  for  society.  The  man  who  deliberately  and 
wantonly  disturbs  that  business  is  an  enemy  of  society  and 
a  disgrace  to  us. 

What,  after  all,  is  real  achievement  in  life  insurance? 
What  has  life  insurance  done  when  it  has  done  well  ?  Isn  't 
the  true  test  of  this  about  the  same  that  we  apply  to  other 
great  movements  ? 

Suppose  the  Church  had  said — We  mustn't  make  too 
many  converts;  they  may  not  all  be  exemplary,  some  may 
backslide.  Until  we  are  sure  that  the  soul  we  convinced  to- 
day is  thoroughly  saved,  we  will  seek  no  fresh  converts.  The 


Militant  Life  Insurance  25 

greatness  of  every  religion,  Christian  or  non-Christian,  is 
not  that  it  thoroughly  saved  a  few,  but  that  it  swept  mil- 
lions into  its  fold.  The  glory  of  medicine  is  best  expressed 
in  the  stern  condemnation  which  it  visits  upon  the  man  who 
makes  a  real  discovery  in  medical  science  and  then  attempts 
to  sell  it,  to  limit  it.  The  real  achievement  is  not  the  dis- 
covery but  the  spirit  which  demands  that  the  discovery  be 
given  not  to  the  people  of  a  state  or  a  nation,  nor  to  those 
who  can  pay  a  price,  but  to  all  the  world. 

So  the  great  life  insurance  company  is  the  company 
that  insures  lives.  If  a  company  clinging  fast  to  sound 
doctrine  in  its  finances  adds  in  a  single  year  to  the  world  of 
the  insured  150,000  people,  it  has  done  a  tremendous  thing, 
it  has  done  the  real  thing.  I  care  not  so  much  whether  the 
manipulator  of  ratios  figures  a  few  cents  more  or  less  for  or 
against  it  ultimately.  It  has  already  passed  a  higher  test. 
It  has  passed  the  highest  test.  It  has  sympathetically  heard 
and  splendidly  answered  the  cry  of  humanity. 

This  is  militant  life  insurance.  This  is  the  institution 
that  is  under  <  fire.  These  are  the  achievements,  too,  that 
some  who  profess  the  faith  most  bitterly  attack,  most  ma- 
liciously misrepresent. 

When  the  grave  difficulties  arose  in  the  Equitable,  there 
was  no  voice  of  hope  from  these  men.  They  croaked  their 
satisfaction;  they  even  put  out  pamphlets  headed,  "I  told 
you  so".  They  profess  to  believe  in  a  plan  of  insurance 
salvation,  but,  obviously,  their  belief  is  really  only  in  their 
particular  interpretation  of  that  plan.  They  entirely  miss 
the  thing  itself.  Railing  at  the  men  who  have  erected  fully 
one-half  of  the  magnificent  structure  which  we  call  Ameri- 
can life  insurance,  damning  a  great  work  and  suggesting 
that  all  was  badly  done  because  it  was  not  done  on  just 
their  plan,  they  cut  as  ridiculous  a  figure  as  would  a  de- 
scendant of  the  men  who  opposed  the  adoption  of  the 
Federal  Constitution,  if  he  should  take  comfort  and  feel 


26  Militant  Life  Insurance 

vindicated  because  the  Civil  War  came  along  a  hundred 
years  later ;  they  cut  as  silly  a  figure  as  would  a  descendant 
of  the  men  who  opposed  the  purchase  of  Louisiana,  if  he 
should  express  satisfaction  and  justify  those  ancestors 
because  at  the  present  time  there  is  yellow  fever  in  New 
Orleans. 

To  stand  up  in  opposition  to  the  spirit,  and,  generally 
speaking,  to  the  plans  of  militant  American  life  insurance, 
has  been,  and  will  remain  a  fruitless  task.  It  is  easy  to 
harass  it;  it  is  easy  to  discredit  it  abroad;  it  is  easy  to 
add  to  its  difficulties.  It  was  easy  to  incite  the  Filipinos  to 
shoot  our  own  troops;  it  is  always  easy  to  give  succor  to 
the  enemy  in  time  of  war.  These  things  are  easy  because 
the  men  who  do  them  as  a  rule  take  no  risks.  They  sit 
at  home  smug  and  comfortable.  They  fritter  away  oppor- 
tunity as  the  old  Equitable  has  frittered  away  a  century. 
Militant  life  insurance  will  commit  grave  errors,  too;  it 
will  occasionally  develop  dishonest  men;  there  will  be  bad 
management;  there  will  be  dishonest  management;  there 
will  be  days  of  shame  and  sorrow ;  but  the  militant  quality 
of  American  life  insurance  is  its  very  soul.  It  will  survive 
all  these  mistakes;  it  will  outlast  dishonest  men;  it  will 
expand,  if  life  is  to  expand;  it  will  grow  more  useful, 
and  more  powerful,  as  men  grow  more  intelligent ;  it  will 
finally  teach  the  world,  as  I  believe,  that  men  can  be  as 
safely  trusted  to  administer  a  public  benefaction  as  they 
can  be  to  administer  a  public  debt ;  it  will  show  the  world 
that  a  life  insurance  premium  is  a  better  thing  than  a 
tax;  that  a  hard-earned  dollar  is  better  used  when  it  goes 
into  a  great  fund  for  the  benefit  of  the  next  generation, 
than  it  is  when  taken  from  a  man  to  pay  the  interest  on 
money  spent  in  war. 

Militant  life  insurance  is  militant  America.  It  already 
had  the  world- view  of  the  future  in  1898  when  the  nation 
awoke  to  a  fuller  realization  of  her  manifest  destiny.  It 


Militant  Life  Insurance  27 

belongs  to  the  forces  that  dream  and  plan  and  work.  It 
is  one  of  the  Empire  Builders  of  the  world.  It  must  and 
does  suffer  the  criticism  that  always  falls  upon  men  and 
plans  of  that  sort;  it  will  also  have  its  vindications  and 
its  triumphs. 

Standing  out  in  advance,  on  the  high  points  and  in  the 
strong  light,  it  must  expect  to  be  assailed.  It  will  be 
feared  and  hated  and  misunderstood.  All  this  only  em- 
phasizes its  responsibility.  It  must  be  able  to  stand  in 
the  light.  It  must  be  absolutely  open  and  clean  in  its 
methods.  It  must  show  that  great  interests  can  be  han- 
dled in  the  daylight.  It  must  meet  the  striker  and  the 
blackmailer  with  a  flood  of  sunlight.  If  it  slips,  as  it  will 
occasionally,  it  must  expect  no  mercy ;  it  will  get  none. 

But  the  issue  is  not  doubtful.  The  great  Western 
Republic  was  in  the  souls  of  the  men  who  faced  the 
stormy  Atlantic  and  dared  the  terrors  of  a  savage  conti- 
nent. No  one  could  forecast  its  form  or  name  or  hour ;  but 
its  coming  was  as  certain  as  Destiny. 

So  the  Republic  of  Man  slumbers  in  that  fighting  plan 
of  co-operation  which  American  life  insurance,  as  a  whole, 
typifies.  No  one  may  forecast  its  form  or  name  or  hour, 
but  it  will  come  because  it  is  written  in  the  stars. 


LIFE  INSURANCE  AND  LIFE 


DELIVERED  BEFORE  THE  EASTEBN  $100,000  CLUB  (NEW-YOBK  LITE  INSURANCE 
COMPANY)  AT  ATLANTIC  CITY,  NEW  JERSEY,  OOTOBEB  17,  1903. 


>F  IT  were  mathematically  possible  to 
organize  a  company  which,  for  a  con- 
sideration, would  guarantee  an  indefinite 
extension  of  individual  life,  the  success 
of  such  an  undertaking  would  be  instan- 
taneous. ManTs  inherent  love  of  life,  and 
instinctive  fear  of  death,  would  welcome 
such  an  enterprise,  because  it  would  offer 
at  once  salvation  and  the  realization  of 
his  fondest  hopes. 

The  millennium  which  such  a  project  would  hold  out  to 
the  hopes  of  the  world,  would,  however,  be  a  disappointment 
if  realized  in  that  way,  and  has,  as  a  matter  of  fact,  already 
been  attained  in  a  better,  a  broader,  a  sounder  and  a  more 
unselfish  way. 

Dealing,  as  we  do,  with  life  in  the  mass,  we  long  ago 
discovered  its  unending  and  almost  unvarying  character; 
and  dealing  with  it  in  its  units,  we  have  learned  that  it  has, 
inherently,  an  immortality  more  certain  than  any  philoso- 
pher's dream,  more  real  than  the  pronouncements  of  any 
creed. 


Life  Insurance  and  Life  29 

Without  claiming  to  do  what  our  hypothetical  company 
would  be  chartered  to  accomplish,  life  insurance  does  much 
more,  and  does  it  better.  Love  of  life  and  fear  of  death 
had  little  to  do  with  creating  an  organization  which  has 
already  gone  far  toward  answering  their  insistent  demands. 
The  desire  to  live  is  essentially  selfish;  the  fear  of  death 
leads  almost  directly  away  from  the  truths  which  lie  in  life 
insurance,  and  neither  has  done  much  to  work  out  its  own 
salvation. 

Unselfish  courage— courage  that  looked  at  the  facts  of 
death  and  life  without  flinching,  and  argued  to  an  unpreju- 
diced conclusion,  even  though  that  conclusion  was  de- 
structive of  some  fondly-cherished  hopes,— together  with 
the  spur  of  necessity,— first  organized  the  life  insurance 
idea. 

Life  insurance  has  found  and  utilized  an  immortality 
about  the  reality  of  which  there  can  be  no  two  opinions.  It 
doesn't  directly  answer  the  problems  which  our  mythical 
corporation  would  undertake  to  solve.  Its  answer  is  indi- 
rect, and  to  the  selfish  demands  of  life  it  comes  in  a  ques- 
tionable shape.  Still,  it  is  worth  while  noticing  that  answers 
to  such  questions,  with  their  deliverances,  are  not  usually 
recognized  when  they  first  appear. 

It  would  perhaps  be  more  correct  to  say  that  the  immor- 
tality which  dwells  in  life,  the  immortality  which  makes  life 
insurance  and  civil  society  possible,  is  a  clear  addition  to  the 
hopes  of  the  world;  it  occupies  a  field  untouched  by  any 
other  conception  of  the  hereafter,  and  doesn't  clash  with 
any  prejudice  or  any  hope ;  it  puts  a  new  meaning  into  the 
present,  and  it  also  gives  us  a  grip  on  the  future.  It  leaves 
the  man  who  is  not  satisfied  with  its  message,  undisturbed 
in  his  dreams  about  a  new  heaven  and  a  new  earth. 

Life  insurance  is  based  on  the  deathless  character  of 
life  in  the  mass,  on  the  power  of  the  individual  not  only  to 
reproduce  its  kind,  but  itself.  Until  these  qualities  were 


30  Militant  Life  Insurance 

realized,  life  had  little  meaning.  The  tendency  of  both 
philosophy  and  religion  was  to  belittle  the  Present,  and  to 
exalt  the  mysterious  Hereafter. 

The  revelation  which  life  insurance  brings  forth  does  not 
attack  any  theory  of  the  Hereafter,  but  it  reverses  all  exist- 
ing theories  about  the  present.  It  exalts  life.  It  empha- 
sizes the  vast  importance  of  the  present.  It  clothes  the 
passing  hour  with  a  new  dignity. 

It  creates  an  intense  belief  in  life  itself.  It  is  a  strange 
fact  that  the  mass  of  mankind  has  never  really  believed  in 
life.  Life  has  been  regarded  as  a  mirage,  an  unreality,  a 
mere  incident  in  a  larger  plan,  and  at  best  a  condition  of 
pain  and  sorrow.  These  views  still  prevail.  For  example: 

The  savage  doesn't  believe  in  life. 

The  materialist  doesn't  believe  in  life. 

The  man  who  holds  that  chance  or  caprice  rules  the 
Universe  doesn't  believe  in  life. 

The  man  who  looks  on  this  world  as  a  "vale  of  tears" 
doesn't  believe  in  life. 

The  man  who  rates  the  world  as  an  oyster,  which,  by 
force  or  skill,  he  will  open,  doesn't  believe  in  life. 

No  man  believes  in  life  as  we  do,  who  doesn't  see  that  it 
is  the  greatest  fact  in  the  Universe;  that  its  duty  is  now; 
that  its  opportunity  is  here;  that  in  it  are  the  inspiration 
of  revelation,  and  the  joy  of  immortality  itself. 

Life  is  not  merely  a  span  of  twenty  or  forty  or  seventy 
years.  It  is  not  birth,  development,  education  and  death,— 
or  rather  it  is  all  these  and  much  more. 

Life  is  the  commonest  and  the  strangest  thing  that 
comes  within  our  knowledge.  It  is  the  simplest  and  the 
most  complex.  It  is  the  most  familiar,  and  the  least  under- 
stood. It  has  been  repeated  in  its  units  so  many  billion 
times,  that  Bryant  is  quite  within  the  facts,  when  he  says 
in  "Thanatopsis," 


Life  Insurance  and  Life  31 

" All  that  tread 

The  globe  are  but  a  handful  to  the  tribes 
That  slumber  in  its  bosom " 

Life  as  we  understand  and  know  and  deal  with  it,  has 
the  sweep  and  the  majesty  of  the  Mississippi ;  while  with- 
out our  doctrine  and  standing  as  a  unit,  it  has  the  weak- 
ness of  a  thistledown  on  the  front  of  a  tempest.  We 
teach  that  even  the  years  of  the  Psalmist,  if  attained, 
mark  merely  the  beginning  of  life.  Possibly  from  the 
individual  standpoint,  these  years  are  the  period  of  its 
gravest  responsibility,  but  they  certainly  are  only  life's 
inception.  Science  brings  us  this  message,  and  life  insur- 
ance utilizes  it.  Science  teaches  us,  and  we  accept  it  as 
one  of  the  few  things  that  we  really  know,  that  we  are 
what  we  are  to-night  because  of  what  our  fathers  and 
mothers  were,  because  of  what  their  forebears  were,  and 
again  theirs,  back  in  an  unbroken  chain  to  a  past  so 
remote  that  it  is  unthinkable.  And  we  know,  even  more 
certainly  and  more  surely,  that  our  children  are  what 
they  are  because  of  what  we  are,  and  we  know  that  what 
they  shall  be,  and  what  their  children  shall  be,  will  be 
determined  largely  by  us,  by  what  we  now  do  and  are. 
We  are,  therefore,  faced  with  the  startling  fact  that  to  a 
very  material  and  real  degree,  we  are  masters  of  the 
future  of  the  world;  masters  of  generations  that  reach 
away  before  us  to  a  point  as  distant  as  we  are  now  distant 
from  the  men  and  women  who  have  sent  the  line  of  life 
down  to  this  point.  Having  recognized  this  truth,  respon- 
sibility thrusts  its  question  upon  us,  and  overwhelms  us, 
because,  through  its  suggestion,  we  find  ourselves  clothed 
with  a  power  which,  while  it  may  exalt,  somewhat  appals 
us.  This  power  is  akin  to  that  which  the  Hebrew  text 
illumines  in  those  sublime  words,  "Let  there  be  light." 
Before  the  illumination  brought  by  our  doctrine  of  life, 


32  Militant  Life  Insurance 

"darkness"  indeed  "was  upon  the  face  of  the  deep." 
With  it  and  its  stern  law  of  duty,  a  new  world  comes 
into  being. 

To  the  man  keenly  alive  to  this  fearful  responsibility 
and  crying  for  help  to  meet  it,  life  insurance  brings  salva- 
tion, just  as  salvation  is  brought  to  men  in  the  scheme 
of  every  religion  that  has  largely  touched  the  imagina- 
tion and  the  souls  of  the  masses  of  mankind.  There  is 
this  essential  difference,  however :  In  religion,  the  attain- 
ment of  Paradise,  the  entrance  within  the  jasper  walls, 
the  right  to  drink  of  the  waters  that  flow  from  the  tree 
of  life  is  an  act  of  grace.  In  life  insurance,  salvation  is 
not  an  act  of  grace,  but  an  act  of  duty  demanded  by 
responsibility.  We  verily  bind  and  loose,  even  as  St. 
Peter  was  commissioned  to  do.  We  bind  and  loose  the 
next  generation  and  the  next.  We  cripple  posterity 
with  diseased  bodies,  or  we  equip  it  with  sound  habili- 
ments of  flesh ;  we  shackle  or  free  the  mind ;  we  shrivel  or 
sweeten  the  soul.  And  we  do  it  finally  and  irrevocably, 
now.  After  the  limit  of  that  unit  of  life  which  is  our  ego, 
is  reached,  the  work  stands,  we  ourselves  stand, — for 
eternity. 

It  is  demonstrably  true  that  when  this  ego  reaches 
its  limits,  we  begin  a  longer  and  a  wider  era  of  existence. 
But  so  far  as  the  duty  of  the  hour  is  concerned,  and  the 
task  of  the  day,  life  has  then  really  passed  beyond  control. 
What  we  do  we  must  do  now;  what  we  leave  undone  we 
cannot  consciously  remedy  hereafter. 

We  look  at  our  children  and  we  see  our  own  Hereafter 
more  distinctly  than  in  the  pictures  of  revelation.  We 
are  conscious  in  the  beginning  that  we  control  that  here- 
after completely.  Then  our  power  begins  to  weaken  and 
forces  awaken  that  tear  the  control  from  us.  We  are 
bewildered  by  this  marvel  of  life  that  is  ours,  and  not 
ours.  As  our  mastery  of  it  grows  weaker,  our  own  quali- 


Life  Insurance  and  Life  33 

ties  stand  out  more  clearly.  Here  we  did  our  duty,  and 
its  effects  shine  out  like  a  beacon  light.  There  we  failed, 
and  its  accusation  thunders  at  us,  even  though  no  other 
ear  can  hear  it. 

When  the  light  fails,  when  the  years  lengthen,  when 
the  outline  of  things  begins  to  grow  dim,  and  this  ego 
approaches  the  limit  of  its  conscious  being,  what  can  bring 
such  comfort,  what  can  go  farther  toward  satisfying 
regrets  over  irretrievable  mistakes  than  the  firm  grip 
which  life  insurance  enables  us  to  take,  and  to  keep  on 
that  other  stage  of  existence,  where  we  shall  certainly 
abide  for  more  years  than  our  eyes  saw  here,  indeed  for 
more  years  than  we  can  now  even  guess? 

We  believe,  therefore,  in  the  reality,  in  the  majesty, 
in  the  power,  in  the  beauty  and  in  the  awfulness  of  life. 
That  conviction  does  not  lead  us  to  quarrel  with  any 
man's  belief,  or  hope  about  the  Hereafter  for  himself. 
We  are  compelled,  however,  to  cry  ' '  woe,  woe ' '  upon  that 
man  who  has  his  eyes  so  firmly  fixed  on  what  he  calls 
the  salvation  of  his  own  soul,  that  he  neglects  or  doesn't 
recognize  the  responsibilities  which  life  places  upon 
him  now. 

We  quarrel  with  no  philosophy,  we  differ  with  no 
religion.  We  bring  another  revelation;  we  show  the  soli- 
darity of  life.  We  push  back  the  horizon  to  an  almost 
infinite  distance ; — and  it  is  certain  that  if  all  the  visions 
of  John  of  Patmos  shall  some  day  become  realities  to  us, 
they  will  not  be  less  grateful,  because  we  had  while  here 
a  firm  grasp  on  the  sublimity  and  the  divinity  of  life 
itself. 

Niagara  can  run  to  waste  for  a  million  years,  it  can 
also  be  applied  to  a  beneficent  civilizing  purpose. 

Life  insurance  is  a  device  by  which  the  endless  stream 
of  life  is  harnessed  and  controlled,  by  which  its  aimless 


34  Militant  Life  Insurance 

story  is  made  into  a  revelation,  its  responsibility  discovered, 
its  immeasurable  strength  utilized. 

By  means  of  life  insurance  we  may  begin  our  longer 
life,  our  immortality,  reasonably  equipped,  conscious  not 
only  of  having  recognized  our  responsibility,  but  of  hav- 
ing done  our  best  to  meet  it. 

We  may  gather  into  our  loins  the  strength  of  the  ages, 
and  say  with  an  exultation  which  not  even  St.  Paul  sur- 
passed, "0,  death,  where  is  thy  sting?  O,  grave,  where 
is  thy  victory?" 

We  believe  in  life  insurance  because  we  believe  in  life. 


LIFE  INSURANCE 
AND  THE  AMERICAN  BUSINESS  MAN 


REMABKS  AT  THE  EIGHTH  ANNUAL  DINNER  OF  THE  $200,000  CLUB, 

NEW- YORK  LIFE  INSURANCE  Co.,  WEST  BADEN, 

INDIANA,  SEPTEMBER  21,  1904 


AN  address  before  the  graduates  and 
friends  of  the  University  of  Vermont,  I 
lately  took  the  ground  that  the  Master  of 
this  civilization  is  the  Business  Man. 

In  that  view,  I  stated  a  new  condition. 
It  is  true  that  the  man  of  action  has 
always  carried  off  the  great  prizes  of  life, 
and  he  probably  always  will;  but  the 
man  of  action  has  never,  previously,  been 
the  business  man,  or  a  man  at  all  akin  to  him.  The  field  of 
masterly  activity  has  only  recently  shifted  to  the  peaceful, 
and  gentle  and  modest  realm  of  business.  Hitherto  the 
leader  and  ruler  of  civilizations  has  been  the  soldier,  rarely 
the  scholar,  and  always  the  man  whose  claim  to  leadership 
was  based  primarily  on  some  assumption  of  superiority. 
The  soldier  and  the  leader  by  Divine  right  or  by  some 
assumed  superiority  have,  with  us,  had  their  day.  The 
scholar  has  had  a  period  of  leadership,  will  probably  have 
another  and  a  better  one,  but  when  the  scholar  rises  now 

35 


36  Militant  Life  Insurance 

to  the  heights  of  mastership,  he  does  so  more  by  the  force 
of  his  personality  than  by  his  learning.  Add  to  the  usual 
qualities  of  the  scholar,  courage,  humanity,  and  an  appre- 
ciation of  real  life,  and  we  have  the  great  man  of  action, 
the  great  leader. 

Unfortunately,  the  scholar  has  not  too  often  gotten  far 
beyond  his  books.  He  is  likely  to  become  so  absorbed  in 
the  marvelous  world  the  microscope  reveals,  or  in  the 
witchery  of  speculative  philosophy,  or  in  the  wonders  of 
chemistry,  or  in  the  miracles  of  electricity,  that  he  gets 
away  from  life,  from  real  human  life,  from  life  that  labors, 
and  sacrifices,  and  loves,  and  dies,  every  day,  every  hour, 
every  second.  Through  such  qualities  he  has  greatly  bene- 
fited humanity,  but  through  these  same  qualities  he  has  lost 
the  leadership  which  was  once  his. 

From  the  standpoint  of  our  profession,  the  scholar  may 
be  called  the  actuary  of  our  social  and  civil  life.  Men  have 
always  felt  that  the  scholar  should  lead,  even  when  he  has 
failed  to  do  so.  They  have  had  an  instinctive  respect  for 
him.  They  have  deferred  to  him  in  his  professional  roles 
with  a  reverence  that  has  sometimes  approached  supersti- 
tion. The  same  deference  has  been  given  to  the  actuary  in 
our  business.  For  many  years  it  was  believed  that  he 
ought  to  lead,  and  he  was  put  in  the  position  of  leadership ; 
but  we  have  learned  that  this  was  even  more  a  mistake  than 
to  expect  the  scholar,  as  he  has  hitherto  existed,  to  be  a  real 
leader.  Experience  has  taught  us  that  an  actuary  is,  after 
all,  not  a  superior  being,  with  occult  powers  and  an  especial 
endowment  from  on  High. 

The  same  experience,  kindred  experiences,  have 
brought  us  to  trust  the  physician  less  and  less.  We  have 
discovered  after  years  of  hard  work  that  the  apparent 
omniscience  of  the  actuary  and  physician  is  really  a 
robe,  which  can  be  stripped  off,  leaving  them  just  men, 
with  powers,  or  without  them,  like  other  men;  and  with 


Life  Insurance  and  the  American  Business  Man     37 

a  function,  but  not  the  most  important  function  to  fulfil 
in  the  development  of  life  and  the  growth  of  a  life  insur- 
ance company. 

Whenever  the  actuary  has  been  made  a  sort  of  fetish, 
set  up  in  a  shrine  and  worshipped,  life  insurance  has  lan- 
guished. In  England  they  still  keep  up  these  old  super- 
stitions with  regard  to  the  actuary,  and  a  majority  of 
English  life  insurance  companies  are  moribund.  We 
have  broken  away  from  such  ideas.  We  honor  the  actu- 
ary, and  we  use  him,  but  we  have  melted  his  crown  and 
broken  his  scepter.  He  is  just  a  man  in  our  machine, 
with  great  responsibilities  and  opportunities  for  usefulness 
when  he  has  the  qualities  that  belong  to  Rufus  W.  Weeks 
and  a  few,  a  very  few  others  like  him. 

We  use  and  honor  the  practical  physician  in  the  same 
way,  and  to  him  we  have  opened  doors  to  real  usefulness 
and  splendid  service ;  but  we  melted  his  crown  and  broke 
his  scepter  some  time  ago,  and  we  nearly  broke  his  heart 
when  we  put  capable  women  at  $40  a  month  to  do  work 
which  he  had  long  sought  to  hold  as  something  profes- 
sional, something  that  could  only  be  properly  done  by  one 
of  the  medical  gild  drawing  large  pay.  And  so  the 
doctor  too  has  come  to  be  just  a  human  being,  with  large 
responsibilities  and  great  usefulness,  when  he  is  modern 
enough  to  appreciate  them  and  brave  enough  to  go  for- 
ward, like  0.  H.  Rogers  and  S.  O.  VanderPoel  and  a  few, 
a  very  few  others  like  them. 

In  the  world  of  affairs,  the  experience  of  the  scholar 
has  been  something  like  that  of  the  actuary  and  doctor  in 
life  insurance.  He  has  been  Priest,  Physician,  Sage,  and 
Law- Giver.  He  has  done  a  great  work,  and  will  do  a 
greater;  but  his  old-time  scepter  was  broken  and  his 
crown  was  melted  because  of  his  tendency  to  take  the 
adulation  of  the  world  seriously;  to  regard  his  learning 
as  an  end,  not  a  means;  to  assume  a  sort  of  divinely  ap- 


38  Militant  Life  Insurance 

pointed  function.  In  the  rough  and  tumble  of  to-day, 
the  scholar  gets  just  what  he  wins,  his  degree  carries 
substantially  no  privilege,  and  his  learning  can  assume 
nothing.  We  have  moved  forward  to  a  place  in  the  de- 
velopment of  the  world  where  we  see  with  clearer  vision, 
and  we  have  discovered  that,  after  all,  our  supreme  object 
is  not  Learning  but  Life.  We  are  not,  therefore,  primarily 
seeking  for  the  man  who  can  merely  teach  us  some- 
thing more;  for  the  man  who  can  produce  a  new  theory 
of  art;  or  lead  us  into  a  new  and  wonderful  world 
in  music;  or  better  organize  an  army,  to  guard  us,  or  to 
conquer  a  province.  We  seek  the  man  who  can  advance 
the  value  of  human  life ;  who  can  make  it  easier,  who  can 
make  it  sweeter;  who  can  banish  disease,  who  can  lessen 
superstition;  who  can  bind  into  service  another  power  of 
nature;  who  can  lighten  the  burdens  of  those  who  toil; 
who  can,  by  wealth  or  wisdom,  add  to  our  comfort  and 
length  of  days.  This  is  the  cry  of  modern  American  civ- 
ilization. In  the  struggle  to  answer  this  cry,  life  insur- 
ance, as  we  know  it,  was  born;  and  in  the  contest  that 
has  followed,  business,  action,  life,  have  arisen  superior  to 
learning,  and  have  grasped  the  commanding  position. 

The  effective  scholar  now  takes  his  learning  as  a  tool 
of  his  trade,  not  something  to  sit  down  and  admire.  Not- 
withstanding all  this,  the  scholar  is  closer  to  life  than  ever 
before,  and  the  actuary  is  really  more  necessary  to  life 
insurance  than  ever  before,  but  the  relations  of  things 
have  changed.  No  practical  insurance  man  will  claim 
that  the  actuary  could  have  made  this  giant  corporation 
of  ours.  If  he  had  been  put  in  the  lead  at  the  beginning, 
we  conclude  that  he  would  probably  have  dwarfed  both 
the  business  and  himself;  but,  under  the  direction  of  the 
man  of  action,  the  actuary  has  come  to  be  a  broader, 
bigger,  wiser,  and  a  better  man  than  the  type  in  Europe 
which  still  rules  the  companies.  So  the  old  type  of 


Life  Insurance  and  the  American  Business  Man     39 

scholar  has  not  done,  and  could  not  do  the  gigantic  tasks 
of  modern  life;  but,  it  is  equally  true,  that  while  the 
scholar  has  in  a  sense  been  dethroned,  he  is  a  wiser, 
sounder,  saner,  and  more  useful  man  than  ever  before. 

This  cry  of  modern  life  has  brought  forth  the  business 
man,  not  the  mere  trader,  or  merchant,  but  the  man  of 
wide  interests,  and  large  outlook,  and  broad  sympathies, 
and  keen  vision,  and  prophetic  feeling;  the  man  whose 
blood  leaps  at  the  challenge  of  problems;  who  thinks  it 
a  greater  thing  to  improve  a  method  in  production  than 
to  take  a  city;  who  would  sooner  form  a  corporation  or 
combine  a  system  of  railroads  than  conquer  a  State.  Just 
here  the  man  of  action  is  really  very  close  to  the  scholar. 
No  alchemist  shut  in  his  dingy  workshop,  with  retort  and 
blow-pipe,  ever  watched  with  more  eager  eye  for  the 
miracle  which  should  transform  base  lead  into  shining 
gold.  The  modern  business  man  is  also  watching  for  a 
miracle.  He  is  harnessing  the  forces  of  nature,  combining 
the  powers  of  industry,  regulating  the  forces  of  society, 
but  his  hope  is  really  the  hope  of  the  alchemist.  The 
alchemist  did  not  turn  lead  into  gold,  but  he  founded  the 
science  of  chemistry,  and  chemistry  has  made  a  new  and 
deeper  revelation  of  the  wonders  of  creation  than  is  re- 
corded in  that  beloved  old  Book,  and  has  wrought  miracles 
in  life  that  mere  gold  could  not  have  wrought.  So  the 
business  man  who  has  put  the  fruits  of  the  scholar's 
works  to  use  and  enormously  lifted  the  body  of  civiliza- 
tion, will  very  likely  never  see  the  lead  of  modern  indus- 
trial conditions  turned  into  the  gold  of  an  ideal  human 
condition;  but  he  has  evolved  an  idea,  he  has  caught  a 
glimpse  of  a  great  truth,  he  has  opened  a  door  through 
which  that  truth  shall  come  forth.  He  has  introduced  the 
corporation ;  the  corporation  has  introduced  co-operation ; 
co-operation  introduced  life  insurance ;  and  life  insurance 
has  sprung  from  the  plans  of  the  man  of  action  as  chem- 


40  Militant  Life  Insurance 

istry  did  from  the  dreams  of  the  alchemist.  The  greatest 
of  all  plans  of  beneficence,  the  soundest  of  all  theories  of 
sociology,  the  truest  program  for  the  abolition  of  poverty, 
the  clearest  exponent  of  true  democracy,  and  of  the  duties 
as  well  as  the  rights  of  man,  the  sanest  view  of  life,  the 
calmest,  bravest  view  of  death, — the  dream  of  the  scholar 
and  the  hope  of  the  philosopher,  these  are  to-day  merely 
definitions  and  descriptions  of  life  insurance. 

Life  insurance  was  not  the  product  of  the  study.  It 
sprang  from  that  sharp  necessity  which  taught  our  fore- 
fathers how  to  snare  their  food.  Its  original  springs  well 
up  hard  by  the  strongest  instincts  of  the  human  heart. 

Life  insurance  and  the  business  man  have  come  up 
together  and  are  a  product  of  the  same  conditions.  These 
conditions  are  the  soundest,  sanest,  sweetest,  that  have 
yet  existed,  and  this  old  world  is  not  only  better  because 
of  both,  but  half  of  all  its  glorious  promise  is  wrapped  up 
in  them.  The  prominence  of  the  modern  business  man 
and  life  insurance  marks,  in  a  way,  the  passing  of  the 
professions ;  in  another,  and  a  truer  sense,  it  involves  their 
advancement  to  a  higher  sphere  of  usefulness. 

That  the  business  man  rules  is  not  because  the  lawyer 
is  smaller  than  he  was  before,  but  the  business  man  has 
sprung  to  a  truer  and  larger  stature.  Under  the  rule 
and  guidance  of  the  business  man,  the  lawyer  to-day  is 
profounder,  and  more  really  and  truly  useful  than  ever 
before.  Modern  business — and  in  no  phase  of  it  so  mark- 
edly as  in  life  insurance, — uses  the  lawyer  as  a  necessary 
part  of  a  clearly  defined  plan.  His  function  is  no  longer 
to  meet  the  accidents  and  disasters  of  life,  and  spell 
justice  out  of  what  is  normally  chaos.  Modern  business 
and  life  insurance  sends  him  out  to  do  definite  things; 
equips  him  as  an  army  is  equipped,  in  advance,  to  guard 
and  protect  the  interests,  which  are,  in  these  days  especi- 
ally, open  to  attack. 


Life  Insurance  and  the  American  Business  Man     41 

Modern  business, — and  in  no  part  more  than  in  life 
insurance, — uses  the  physician  as  a  part  of  a  fixed  pro- 
gram ;  it  places  him  in  a  plan  that  is  moving  intelligently 
and  definitely  towards  a  specific  purpose.  In  these  rela- 
tions, the  physician  no  longer  makes  his  career  and  his 
fortune  after  the  calamity  has  happened  and  because  of 
ignorance  and  cruelty  and  superstition.  He  aggressively 
attacks  all  these  things,  takes  the  offensive  against  these 
enemies  of  mankind.  The  life  insurance  corporation  sends 
him  over  the  frontier  of  the  known  and  pushes  back  the 
borders  of  the  unknown.  In  these  relations,  the  physician 
does  not  attempt  the  problems  which  affect  human  life 
merely  because  of  a  taste  that  leads  him  that  way,  be- 
cause of  a  dream  or  ambition — although  that  incentive 
is  not  lessened — but  because  a  great  corporation  with  a 
definite  purpose  sends  him  against  the  problems,  equipped 
as  no  individual  himself  could  ever  be  equipped. 

Modern  business  again,— and  in  no  part  of  it  more  than 
in  life  insurance,— advances  morality,  responsibility,  prob- 
ity, good  citizenship,  commercial  integrity,  and  that  good 
faith  which  is  the  basis  of  all  civilization;  not  haphazard, 
but  on  lines  of  a  definitely  laid  out  campaign ;  and  in  thai 
part  of  religion  which  lies  this  side  the  supernatural,  no 
agent  is  so  potent  in  the  advancement  of  humankind  as  the 
life  insurance  agent. 

I  have  said  that  the  modern  man  of  action  is  the  busi- 
ness man,  and  I  now  add  that  this  type  promises  to  reach  its 
fullest,  its  finest  condition  in  that  form  of  business  to 
which  we  are  devoted.  A  little  consideration,  I  think,  will 
show  that  this  is  a  natural  conclusion. 

Here  is  the  rarest  grouping  of  theories  and  conditions 
that  have  hitherto  induced  men  to  labor  or  study.  Within 
our  profession  are  law,  medicine,  diplomacy,  finance — 
including  banking  and  exchange,— currency,  investments, 
estate,  and  loans.  Ours  is  a  country  whose  boundaries 


42  Militant  Life  Insurance 

not  only  ignore  professional,  national  and  racial  divisions, 
but  they  run  parallel  with  that  frontier  which  divides  life 
and  death.  We  organize  armies  to  fight,  but  not  against 
other  men.  We  use  the  law,  but  always  to  do  justice.  Our 
theory  of  equity  is  so  high  that  we  are  in  constant  danger 
of  attacks  from  the  statute  law  and  the  judges  who  apply 
it.  About  the  only  injustice  that  results  to-day  from  an 
up-to-date  life  insurance  contract  follows  the  action  of 
small-minded  judges,  who  make  narrow  applications  of 
principles  in  special  cases,  in  order  at  the  moment  to  defeat 
a  corporation.  As  a  result  we  are  frequently  compelled  to 
modify  our  policies  and  change  our  practices,  not  in  the 
direction  of  greater  liberality. 

We  use  practical  science,  not  to  sustain  any  precon- 
ceived theories,  or  support  any  fiction  of  professional  cour- 
tesy or  prerogative.  We  bring  that  science  and  art  directly, 
and  practically,  and  aggressively,  into  the  service  of  human- 
kind. We  wholly  eliminate  from  the  situation  the  personal 
factor,  that  tinge  of  superstition,  that  assumption  of  superi- 
ority that  has  always  marred  the  work  of  the  lawyer  and 
the  doctor  when  laboring  from  a  personal  motive. 

We  include  business,  not  for  private  gain,  not  to  heap 
up  great  individual  fortunes,  but  for  the  general  good, 
for  the  welfare  of  millions;  and,  in  this,  our  incentive 
is  as  keen  as  that  which  drives  men  to  accumulate 
millions  for  themselves.  We  exercise  all  the  powers  that 
go  with  ownership  of  millions,  with  a  touch  of  responsi- 
bility that  does  not  attach  to  private  ownership,  and  as  a 
part  of  a  programme  which  teaches  how  by  co-operation  to 
insure  an  abundance  of  the  things  of  this  world.  Through 
life  insurance,  as  against  individual  accumulations,  we  lay 
up,  literally,  treasure  where  moth  and  rust  do  not  corrupt, 
and  where  thieves  only  rarely  break  through  and  steal. 

All  these  things,  however,  express  only  what  we  are; 
they  but  faintly  indicate  that  we  possess  qualities  of 


Life  Insurance  and  the  American  Business  Man     43 

another  and  a  higher  order.  Weighed  and  measured  by 
the  world's  estimate  of  corporations  generally,  we  are 
rather  proud  of  ourselves ;  we  glory  in  our  strength ;  we  are 
not  unimpressed  with  our  achievements.  We  are  amongst 
the  largest  employers  of  labor.  We  are  the  largest  investors 
in  the  world,  and  have  a  stake  in  universal  peace  and  in  the 
reign  of  law  that  is  not  equaled  by  any  of  the  Nations. 
We  are  militant  as  well  as  peaceful.  We  are,  in  the  energy 
of  our  organization,  a  survival  of  that  fierce  devotion  which 
made  the  early  Christians  baptize  whole  tribes  by  force. 
We  are,  in  short,  a  huge  fighting  machine. 

But  the  true  life  insurance  man  understands  that  these 
are,  after  all,  only  the  prologue,  the  introduction  to  another 
act  in  the  tragedy,  comedy  and  history  of  life,— and  there 
we  shall  take  on  our  true  character,  and  play  our  real  part. 
Then  we  shall  understand,  as  some  of  us  do  not  now,  that 
life  insurance,  while  essentially  a  business,  is  more  than  a 
business  in  several  particulars: 

Life  insurance  is  more  than  a  business  in  the  material 
with  which  it  deals.  Its  material  is  finer  than  the  material 
dealt  in  by  any  corporate  body  not  doing  a  similar  business. 

All  great,  creative,  business  enterprises  deal  with  some 
sort  of  material,  if  you  will,— and  then  they  turn  out  a 
product.  So  do  we.  For  example,  the  Steel  Corporation 
deals  with  iron  ore  and  pig-iron,  and  turns  out  an  almost 
endless  variety  of  products.  The  copper  companies  do  the 
same  thing,— the  gold  and  silver  mining  companies  also,  and 
the  great  network  of  railroads,  in  effect.  These  enterprises 
strike  the  note  of  the  age,  and  the  business  man,  through 
wise  and  statesmanlike  management  of  them,  has  come  to 
be  dominant.  But  iron  ore  and  pig-iron,  the  raw  material 
of  the  Steel  Corporation,  certainly  are  not  be  compared  to 
men,  our  raw  material.  Neither  are  steel  products  to  be 
compared  with  our  finished  product. 

Dealing  with  such  material,  life  insurance  presents  a 


44  Militant  Life  Insurance 

structure  more  certain,  more  unvarying,  and  more  powerful 
than  the  body  of  any  other  human  enterprise;  surpassing 
in  its  inherent  strength  anything  of  which  we  now  know, 
and  probably  anything  of  which  we  can  conceive.  All 
great  industries  exist  to  meet  some  demand  of  life.  These 
demands  vary,— they  shift,— they  change.  Industries  fre- 
quently stand  on  a  very  insecure  foundation.  However 
great  they  become,  their  tenure  of  life  is  uncertain.  The 
entire  equipment  of  vast  enterprises  is  sometimes  relegated 
to  the  scrap-heap  in  a  night.  For  example,  at  the  present 
hour  who  can  tell  how  much  of  a  menace  wireless  teleg- 
raphy may  become  to  the  established  system,  with  its  mil- 
lions of  invested  capital?  Who  can  tell  what  the  result 
shall  be  of  the  conflict  now  on  between  electricity  and 
steam?  In  all  these  questions  life  insurance  has  a  direct 
and  immediate  interest.  We  have  the  interest  of  the  busi- 
ness man  because  we  are  constant  buyers  of  securities;  but 
our  interest  is  not  that  of  the  corporation  which  represents 
the  industry  on  which  the  security  stands.  It  is  much 
wider,  because  it  comprehends  the  entire  field  of  human 
industry. 

Primarily,  we  deal  with  human  life,  something  that  does 
not  shift,  or  vary,  or  change,  except  to  become  constantly 
more  valuable  and  more  powerful.  Human  life  has  passed 
beyond  the  point  where  it  will  fluctuate  as  it  formerly  did, 
while  maintaining  an  unequal  contest,  now  with  the  great 
ice-cap,  now  with  wild  beasts,  and  now  with  itself.  What- 
ever war  may  hereafter  threaten  and  whatever  destruction 
it  may  actually  achieve,  it  will  never  again  be  able  to  make 
any  very  important  recession  in  the  vitality  of  the  world. 

This  cry  of  modern  civilization  is  being  answered  in 
very  tangible  form, — not  in  more  learning  as  such,  not 
through  the  exercise  of  miraculous  or  occult  powers,  but 
through  the  evolution  of  a  new  man,  through  better  homes, 
better  food,  better  hygiene,  better  schools,— through  labor- 


Life  Insurance  and  the  American  Business  Man     45 

saving  machinery  and  the  consciousness  of  power  that  comes 
to  every  man  when  his  self-respect  springs  up  full-armed. 
I  do  not  deny  learning  its  part  in  this;  but  the  mighty 
hand  through  it  all,  the  hand  that  has  led  even  learning 
out  of  some  dark  places,  has  been  the  hand  of  the  fearless 
business  man.  Advancing  a  step  farther,  coming  on  to  that 
phase  of  human  development  when  this  cry  of  human  life 
is  to  be  more  fully  answered,  when  the  dream  of  the 
alchemist  is  to  reach  its  unexpected  and  marvelous  fruition, 
we  reach  the  frontier  of  that  period  when  the  business  man 
will  pass  into  his  second  and  finer  period  of  development. 
Already  you  can  see  the  coming  change.  It  involves  not 
only  the  dominance  of  beneficent  theories,  but  necessarily 
the  development  of  powers  that  the  world  generally  scarcely 
dreams  of. 

Let  me  express  it  by  a  figure  of  speech : 

The  insured  are  the  coral  workers  in  the  sea  of  life. 
They  are  silently  creating  a  vast  continent,  just  below  the 
froth  of  the  dashing  waves,  and  the  howling  tempests  of 
the  industrial  and  financial  world. 

The  real  power  of  the  sea  is  not  on  the  surface;  it  is 
underneath.  In  that  quiet  world  tiny  animals  co-operate, 
take  minute  particles  from  their  surrounding  world,  and 
little  by  little  construct  the  floor  of  a  new  hemisphere 
against  which  all  the  waves  of  all  the  tempests  that  blow 
shall  finally  beat  in  vain.  In  life  we  see  the  great  events 
only  in  industry,  in  business;  we  see  this  wonderful  de- 
velopment and  that;  this  great  success,  that  great  failure; 
this  great  fortune,  that  great  invention;  and  all  seem 
wonderful  and  colossal.  The  seeming  is  reality,  too.  But 
the  world  is  beginning  to  catch  a  new  note  in  this  toil  and 
turmoil.  We  are  beginning  to  feel  the  lift  of  the  floor  of 
this  new  continent  which  the  toilers  have  silently  laid. 
Through  the  handful  of  people  who  have  adopted  our 
great  device,  the  voice  of  humanity  begins  to  speak,  and  the 


46  Militant  Life  Insurance 

tremendous  structure  which  has  been  erected,  just  below 
the  stress  and  strain  and  gain  and  loss  of  business,  begins 
to  show  itself,  and  like  the  continent  built  by  the  tiny  ani- 
mals beneath  the  sea,  it  will  rise  superior  to  all  the  storms 
that  assail  it. 

The  leader  of  this  age  is  the  business  man.  He  has  in- 
troduced the  idea  of  co-operation,  while  practicing  a  pro- 
gramme which  is  based  on  competition.  The  wickedness  of 
his  own  programme  compelled  him  to  recognize  a  better 
one;  but  his  efforts  toward  co-operation  are,  after  all,  more 
or  less  futile,  and  he  has  at  best  only  prepared  the  way  for 
the  coming  of  the  better  era  which  we  represent.  The 
field  has  already  overwhelmed  him;  just  as  the  grain 
fields  of  the  West  made  it  necessary  that  somebody  should 
invent  the  modern  reaper.  A  sickle  could  gather  grain, 
but  it  could  not  gather  the  harvests  of  the  West.  The  busi- 
ness man,  with  his  corporations,  could  develop  the  idea  of 
co-operation,  but  he  cannot  satisfy  it,  and  he  cannot  take 
care  of  the  harvest.  Life  insurance  is  the  one  device  that 
is  equal  to  the  situation.  It  seeks  a  material  equivalent 
not  merely  for  the  unit  of  life,  the  individual,  but  for  life 
itself— life  running  through  the  ages,  life  the  mysterious, 
the  awful,  the  endless.  Business  has  not  yet  solved  the 
individual  problem.  It  is  not  likely  to  do  even  that.  Life 
insurance  has  solved  the  individual  problem,  and  it  alone 
can  reach  the  larger  problems:  this  is  its  real  mission.  It 
will  bring  in  the  era  of  true  co-operation  which,  in  morals 
as  well  as  in  business,  will  be  as  superior  to  the  age  of  com- 
petition as  the  age  of  competition  was  superior  to  savagery. 


OUR  SECOND  GREAT  ENEMY 


DELIVERED  IN  JANTJAKY,  1905,  BEFORE  THE  AGENCY  DIBEOTOBB  (NEW-YOBK  LIFE 

INSURANCE  COMPANY)  AT  LAKEWOOD,  N.  J.;  ALSO  BEFORE 

CONVENTIONS  IN  CHICAGO  AND   ST.  Louis 


,HE  first  great  enemy  of  life  insurance 
was  man's  inability  or  unwillingness  to 
appreciate  and  meet  his  personal  re- 
sponsibility. This  enemy  we  have  meas- 
urably vanquished;  the  swelling  totals 
of  life  insurance  and  the  facts  set  forth 
in  our  last  annual  statement  show  this 
conclusively. 

The  second  great  enemy  of  life  insur- 
ance is,  however,  a  foe  of  a  different  sort.  Bluntly  put, 
this  enemy  is  the  instinctive  fear  which  men  seem  to  have 
of  vast  accumulations  of  wealth.  I  want  to  consider  for  a 
few  moments  what  there  is  in  life  insurance  as  we  practice 
it  which  has  brought  us  to  the  point  where  conflict  with 
this  enemy  arises,  and  what  there  is  in  the  history  of  man- 
kind that  makes  this  conflict  natural  and  inevitable. 

We  love  to  dwell  upon  the  fact,  and  it  is  a  fact,  that 
we  have  not  only  brought  forth  here  in  the  United  States 

47 


48  Militant  Life  Insurance 

a  new  nation,  but  have  added  something  to  the  desira- 
bility of  human  life.  It  does  not  stir  us  so  much  to  review 
the  great  deeds  recorded  in  our  history  as  it  does  to  repeat 
with  unending  pride  that  this  is  a  free  country;  and  it  is 
a  free  country,  in  spite  of  the  things  that  make  us 
ashamed, — in  spite  of  what  we  call  greed  for  money,  in 
spite  of  municipal  corruption,  in  spite  of  the  tyranny  of 
trusts  and  labor  unions, — it  is  a  free  country.  That 
freedom,  however,  is  to  us  more  impressive  for  what  it 
promises  to  be  and  to  do  than  for  what  it  has  done.  Every 
impulse  of  this  Nation  makes  it  look  forward.  Nothing 
has  yet  been  achieved  that  we  do  not  expect  to  surpass. 
It  was  a  great  thing  to  create  the  Nation ;  it  was  a  greater 
thing  to  keep  it  free.  It  was  a  wonderful  thing  to  con- 
quer the  West,  and  to  bind  the  distant  parts  of  the  coun- 
try together  with  bands  of  steel,  but  it  was  a  surer  evi- 
dence of  inherent  soundness  and  future  greatness  that,  at 
a  tremendous  crisis  in  our  history,  the  intuitions  and  the 
judgment  of  the  people  selected  Abraham  Lincoln  as 
President  of  the  United  States.  The  spectacle  presented 
by  Pittsburgh,  with  all  that  it  is  and  all  that  it  promises,  is 
impressive,  but  it  is  not  so  impressive  as  the  story  of  the 
poor  immigrant  who  here  became  a  captain  of  industry, 
a  master  of  finance,  a  great  leader  in  public  thought. 

The  American  Nation  is  the  rich  gift  of  all  the  peoples 
of  the  earth.  By  an  intuition  which  delved  deeper  than 
philosophy  can  go,  the  world  early  recognized  the  oppor- 
tunity presented  here,  and  with  conviction  and  hope  took 
quick  and  definite  action.  States  have  been  conquered, 
sold,  bartered,  and  given  away,  they  have  voluntarily 
yielded  sovereignty,  but  in  all  the  story  of  the  world  there 
is  no  parallel  to  that  glorious  procession  of  common- 
wealths which  freely  and  voluntarily  began  marching  into 
the  Union  in  1791,  and  the  end  is  not  yet.  This  created 
and  has  put  upon  us  a  peculiar  obligation.  We  have  the 


Our  Second  Great  Enemy  49 

usual  obligations  of  nationality,  but  we  owe  something 
above  and  beyond  that:  we  owe  something  to  the  instincts 
of  humanity,  something  that  calls  us  back  to  every  nook 
and  corner  of  the  earth,  something  that  ignores  the  limits 
set  by  color  or  race  or  geographical  boundaries,  something 
that  we  cannot  pay  in  our  capacity  as  a  nation.  The 
people  came  to  us  bringing  the  very  vitals  of  free  govern- 
ment. They  brought  strong  bodies,  and  clean  hands,  and 
lofty  aspirations,  and  love  of  liberty.  They  consciously 
and  specifically  sought  a  land  of  opportunity,  an  asylum 
for  the  oppressed,  a  people  free,  and  possibly  some  day 
mighty.  For  this,  as  a  nation,  we  owe  a  shining  example 
of  good  order,  and  sane  government,  and  free  institutions, 
and  justice.  All  these  obligations  we  may  fairly  claim  to 
have  decently  paid;  but  this  does  not  express  all  of  our 
debt.  Our  forebears  unconsciously  created  a  wider  obliga- 
tion, and  we  unconsciously  have  begun  to  pay  it.  We 
have  begun  to  pay  it  through  life  insurance,  the  only  pro- 
gramme whose  theory  is  high  enough  and  whose  base  is 
broad  enough  to  comprehend  the  height  and  breadth  and 
fineness  of  this  peculiar  debt  which  we  owe  to  all  the 
peoples  of  the  world. 

Life  insurance  deals  with  something  that  is  as  funda- 
mental and  as  necessary  to  any  proper  development  of 
the  race  as  air  and  light  and  water.  Through  an  organi- 
zation that  is  world  wide,  we  carry  everywhere  the  truth 
that  in  the  struggle  for  existence — a  struggle  that  in  some 
form  has  been  going  on  since  the  beginning — life  can  be 
so  organized  and  marshaled  against  its  foes  that  the  es- 
sentials of  existence  become  as  reasonably  certain  as  a 
place  to  stand  and  air  to  breathe.  This  is,  perhaps,  our 
first  contribution  toward  the  liquidation  of  our  obligation. 
We,  ourselves,  hardly  comprehend  what  the  full  recog- 
nition of  that  principle  means,  just  as  the  pioneers  who 
landed  at  Jamestown  had  no  premonition  of  what  was  to 


50  Militant  Life  Insurance 

follow,  just  as  the  band  on  the  Mayflower,  and  the  handful 
of  men  who  captured  Vincennes,  and  the  men  who  dis- 
covered Oregon,  and  those  who  purchased  Louisiana, 
prophets  all  of  them,  had  no  real  conception  of  the  rela- 
tion of  these  acts  to  the  future.  While  we  may  not  com- 
prehend all  that  this  idea  wll  ultimately  achieve  we 
rejoice  in  some  of  the  splendid  things  it  has  already 
helped  us  to  do.  For  example:  We  are  beginning  to 
retrace  the  painful  steps  taken  by  the  immigrant,  we 
literally  take  back  the  bread  cast  upon  the  waters.  For 
nationality  which  they  gave  us  we  give  internationality ; 
for  free  government  which  they  brought  us  we  show  how 
men  may  be  free  from  anxiety,  from  poverty,  and  measur- 
ably free  from  disease.  To  the  rule  of  the  people  we  add 
by  discovery  and  application  the  law  that  governs  life, 
the  law  that  will  carry  the  fruits  of  our  labors  on  for  the 
benefit  of  coming  generations  as  certainly  as  nature  puts 
our  blood  and  bone  into  those  whom  we  beget.  To 
freedom  from  the  fear  of  tyrants  we  add  freedom  from 
the  fear  of  death. 

In  making  this  beginning,  however,  on  a  scale  large 
enough  to  comprehend  in  some  sense  our  obligation  to  all 
the  world,  we  have  already  erected  what  seems  a  stupen- 
dous structure,  and  that  has  brought  us  face  to  face  with 
this  new  enemy.  What  gave  birth  to  this  enemy  let  us 
consider  for  a  moment. 

The  kings  of  old  are  dead,  but  the  king  still  lives.  The 
king  now  is  the  man  who  controls  in  some  measure  the 
material  wealth  of  this  modern  world.  It  is  the  fashion 
to  sneer  at  material  wealth,  and  we  are  apt  to  quote  the 
good  old  text  which  says  that  love  of  money  is  the  root 
of  all  evil.  On  the  contrary,  money,  or  wealth,  is  the  very 
substance  of  civilization,  and  the  very  essence  of  virtue. 
It  means  comfort,  freedom,  health,  leisure, — if  not  all, 
certainly  most  of  the  things  that  make  life  worth  while. 


Our  Second  Great  Enemy  51 

People  may  fear  it,  but  they  fight  for  it,  and  why 
shouldn  't  they  ?  They  fear  it  because  as  yet  they  recognize 
no  general  plan  under  which  their  rights  may  be  protected, 
as  the  plan  of  the  ballot  protects  their  civil  rights. 

Out  of  this  fear  of  wealth  comes  our  second  great 
enemy.  We  cannot  properly  repay  our  obligation  to  the 
world,  we  cannot  go  on  developing  life  insurance,  without 
overcoming  this  enemy  as  completely  as  we  overcame  our 
earlier  foe.  This  last  foe  faces  all  modern  life.  It  con- 
fronts every  great  corporation.  Attempts  are  everywhere 
being  made  to  overcome  it ;  laws  are  being  passed  for  the 
regulation  of  wealth;  other  laws  will  be  passed;  courts 
are  busy ;  statesmen  are  busy ;  politicians  are  very  busy ; — 
but  out  of  all  the  toil  and  turmoil  comes  more  confusion 
than  justice  and  no  adequate  solution.  Indeed,  I  am 
inclined  to  think  that  no  proper  expression  of  this  phase 
of  human  rights  can  be  had  in  mere  form  of  law.  The 
regulation  of  corporations  is  necessary,  and,  within  the 
limitations  set  by  natural  law,  the  President  of  the  United 
States  is  correct  in  demanding  the  enforcement  of  such 
statutes  as  we  have  written  and  the  enactment  of  others 
if  necessary.  But  most  legislation  had,  and  most  of  that 
proposed,  is  based  on  mistaken  ideas.  Few  laws  existing 
for  this  purpose  are  anything  but  negative  or  essentially 
destructive.  They  control  by  destroying.  They  stifle  and 
hinder.  They  aim  to  nullify  great  natural  laws.  They  are 
based  on  fear,  or  jealousy,  or  political  ambition.  They  are 
written  in  the  spirit  that  springs  naturally  out  of  cen- 
turies of  destruction  and  loss.  The  law  makers  need  en- 
lightening quite  as  much  as  the  corporations  need  con- 
trolling. 

We  approach  the  problem  from  quite  a  different  stand- 
point. Let  us  consider  how  we  shall  overcome  the  enemy. 

Men  asserted  their  civil  rights,  as  against  the  king 
and  against  the  power  which  he  exercised,  through  the 


52  Militant  Life  Insurance 

ballot.  Men  will  assert  their  rights  in  the  material  world 
as  against  the  misuse  of  material  wealth  which  is,  happily, 
so  enormously  increasing,  through  the  principle  of  co- 
operation, and  the  instrument  of  co-operation  and  control 
will  largely  be  a  policy  of  life  insurance  in  a  mutual  com- 
pany. This  implement  is  as  much  superior  to  the  ballot 
as  the  civilization  of  wealth  will  be  superior  to  the  civili- 
zation of  politics. 

All  good  laws  are  said  to  be  revelations.  This  law  of 
life  insurance  is  a  revelation:  A  revelation  not  merely 
on  its  purely  protective  side,  but  a  revelation  in  the  power 
of  control  which  it  is  coming  to  exercise  over  wealth 
and  the  dangers  that  go  with  its  irresponsible  possession. 
The  ballot  after  all  frequently  met  blow  with  blow;  in 
order  to  reform  it  had  to  destroy.  Life  insurance  pre- 
serves men's  rights  without  destroying  anything,  and  its 
achievements  are  so  high  and  so  fine  that  it  may  be  defined 
in  this  wise : ' '  life  insurance  is  wealth  created  by  the  mass, 
but  distributed  and  controlled  in  the  interest  of  the  indi- 
vidual under  a  program  more  rational  and  more  equitable 
than  can  be  expressed  in  law  or  worked  out  in  govern- 
ment. "  The  ballot  is  illogical  even  in  its  own  field.  It 
never  much  reckoned  ability,  or  virtue,  or  responsibility, 
or  property.  The  principle  which  underlies  life  insurance, 
however,  gives  even-handed  justice.  It  grants  just  what 
is  deserved,  takes  nothing  away.  If  it  doesn't  put  a 
conscience  into  wealth,  it  takes  the  cruelty  and  the  greed 
out  of  it.  We  stand,  therefore,  after  a  fashion,  at  the 
point  where  some  of  the  most  important  processes  of  the 
world  seem  about  to  change.  Men  are  moving  out  and 
we  are  leading  them  out  of  their  earlier  period  of  per- 
petual self-destruction.  We  are  asking  men  to  turn  their 
eyes  away  from  certain  horrible  processes,  with  which 
they  have  become  familiar  and  which  they  no  longer  much 
fear,  to  consider  other  processes  that  are  peaceful  and 


Our  Second  Great  Enemy  53 

beautiful,  and  which,  strange  to  say,  they  seem  instinctively 
to  dread. 

Let  me,  if  I  can,  emphasize  the  contrast  between  what 
men  always  have  done,  and  what  we  hope  they  will  come 
to  do. 

The  most  pitiful  and  wonderful  thing  in  all  history 
is  what  one  writer  has  called  the  ''martyrdom  of  man". 
This  is  a  short  way  of  saying  that  man  has  always  paid 
a  fearful  price  for  whatever  he  has  learned  or  whatever 
he  has  gained,  a  price  not  apparently  called  for  by  nature 
but  by  the  evil  passions  of  the  human  heart;  and,  as  a 
result,  the  history  of  the  world  is  the  history  of  its  wars. 
The  history  of  the  world  is  a  history  of  slaughter,  of  life 
squandered  and  wasted;  and  in  this  particular  we  have 
been  as  guilty  as  almost  any  nation  that  ever  existed. 
Our  Civil  War,  statisticians  tell  us,  in  men  and  money, 
counting  both  sides  and  reckoning  the  ultimate  cost,  rep- 
resents the  frightful  total  of  eleven  billion  dollars.  Yet 
such  is  the  capacity  of  life  that  in  forty  years  this  waste 
has  been  substantially  recovered.  It  all  transpired  within 
the  life  of  our  Company,  and  it  represents  a  cruel  waste 
of  value  five  times  our  outstanding  insurance  and  twenty- 
seven  times  the  money  we  have  assembled  during  a  much 
longer  period.  Few  people  ever  worried  much  about 
the  ability  of  this  Nation  to  pay  this  debt.  Many  people 
are  worried  about  the  size  of  the  New- York  Life. 

Again,  and  to  use  an  illustration  that  is  a  little  nearer 
to  our  time.  Russia  announces  that  she  will  spend  eight 
hundred  million  dollars  during  the  next  ten  years  for  a 
new  fleet.  When  she  abandoned  Dalny  the  other  day, 
she  blew  up  works  that  cost  one  hundred  and  fifty 
million  dollars.  Port  Arthur  cost  to  build,  and  then  to 
destroy,  four  hundred  million  dollars.  This  is  a  story  that 
has  been  repeated  many  times.  Men  give  ungrudgingly 
and  unhesitatingly  of  their  vitality  and  their  wealth  in 


54  Militant  Life  Insurance 

order  to  destroy  other  men  in  defence  of  what  they  call 
nationality.  The  cost  of  the  conflicts  had  in  support  of 
this  idea  is  a  total  that  could  not  be  expressed  in  our 
science  of  numbers.  No  expense,  no  total  seems  able  to 
stagger  men  when  called  for  in  this  way,  but  face  men 
with  accumulations  that  are  constructive,  even  moderate 
accumulations,  and  they  hesitate.  Spread  before  the 
ordinary  citizen,  who  is  familiar  with  what  has  happened 
in  Manchuria  within  twelve  months  and  knows  the  cost 
and  the  waste,  and  takes  it  as  a  matter  of  course,  spread 
before  him  the  present  condition  of  the  New- York  Life, 
and  he  stands  large-eyed  with  wonder.  Without  thinking, 
the  average  citizen  will  still  load  billions  of  debt  on  gen- 
erations unborn,  provided  the  debt  is  contracted  in  war 
or  in  preparation  for  war,  but  show  him  an  exhibit  that 
foreshadows  billions  of  accumulations  for  the  benefit  of 
generations  unborn,  or  represents  debt  incurred  in  public 
improvements,  and  he  grows  nervous  and  doubts  its  wis- 
dom. The  fact  is  that  the  world  worries  less  over  a  billion 
dollars  wasted  than  over  a  tenth  of  that  sum  saved.  It 
knows,  after  a  fashion,  that  it  costs  money  to  kill  a  man, 
but  it  doesn't  worry  over  the  fact.  Here  is  a  strange 
contradiction,  and  this  contradiction  which  we  now  have 
met  in  the  pursuit  of  our  business,  in  the  incidental  at- 
tempt to  pay  our  obligation  to  the  world,  involves  the 
great  danger  and  the  problem  in  the  future  of  life  insur- 
ance. The  reality  of  this  feeling  we  can  test  by  a  little 
self-examination.  Let  me  illustrate  it.  Suppose  a  year 
ago,  for  example,  Russia  and  Japan  instead  of  rushing  into 
war  had  stopped  and  said,  ''After  all,  war  is  foolish  and 
wicked  and  savage.  If  we  gain  all  we  seek,  or  lose  all  we 
fear,  neither  the  gain  nor  the  loss  can  equal  the  loss  to  the 
people  once  war  is  entered  into;  therefore,  we  will  each 
adopt  a  different  program. ' '  And  suppose  Russia  had  put 
aside  six  hundred  million  dollars  for  the  benefit  of  a 


Our  Second  Great  Enemy  55 

million  and  a-half  men ;  and  suppose  Japan  had  set  aside 
four  hundred  million  dollars  for  the  benefit  of  nine  hun- 
dred thousand  men,  and  each  had  agreed  that  the  fami- 
lies of  these  men,  under  certain  conditions,  should  be  the 
beneficiaries  of  these  moneys.  The  world  would  have 
laughed;  the  plans  would  have  been  called  quixotic;  and 
we  would  have  laughed  with  the  world.  But  when,  instead, 
the  nations  called  on  these  men  to  die  and  the  money  was 
spent  on  cannon  and  powder  and  battleships,  the  world 
approved  and  we  joined  in  the  approval. 

Or  take  an  example  of  another  sort,  closer  home.  In 
New  York  we  have  just  completed  a  wonderful  system 
of  rapid  transit,  a  noble  conception  boldly  executed.  It 
took  years  to  work  public  opinion  up  to  a  point  where  the 
plan  could  be  carried  through.  The  public  hesitated  over 
the  expense.  It  is  now  properly  rated  one  of  the  greatest 
public  works  in  the  history  of  municipal  government.  It 
sets  a  new  mark  in  urban  development.  The  plant  will  be 
serving  New  York  and  the  nation  two  hundred  years 
hence.  It  took  four  years  to  build  it.  It  cost  thirty-five 
million  dollars.  Yet  within  the  last  twelve  months, 
there  was  sent  from  New  York  to  Japan  in  cash  fifty-five 
million  dollars,  all  of  which  went  for  a  destructive  pur- 
pose ;  twenty  millions  more  than  was  spent  on  the  subway 
in  four  years.  Yet  no  one  thought  much  about  it,  no  one 
worried  over  it,  no  one  objected  to  it. 

Again,  we  are  staggered  over  the  probable  cost  of  that 
greatest  of  all  public  improvements  yet  undertaken — the 
Panama  Canal.  The  world  has  dreamed  of  this  for  a 
hundred  years,  it  has  been  repeatedly  named  in  treaties 
between  nations,  and  has  been  looked  forward  to  as  one  of 
the  events  that  would  shift  the  trade  relations  and  the 
history  of  the  world.  It  would  be  so  expensive  that  none 
but  a  great  and  a  wealthy  nation  could  build  it,  yet  what 
the  world  has  hesitated  over  for  a  hundred  years,  the 


56  Militant  Life  Insurance 

cost  of  this  canal,  has  been  spent  three  times  over  within 
the  last  twelve  months  in  the  East. 

I  dwell  on  these  facts  because  out  of  them  comes  our 
second  great  enemy.  They  emphasize  the  contrast  be- 
tween the  destructive  view  which  possesses  us  all,  and  the 
constructive  view  which  is  coming.  In  order  to  meet  this 
new  problem  we  must  properly  conceive  the  wickedness 
and  horror  of  the  old  method.  We  represent  an  idea 
which  has  no  part  in  the  old  program;  it  does  not  har- 
monize with  that  article  of  my  insurance  faith  which 
hails  life  insurance  as  "a  new  Evangel  whose  creed  is 
self-respect,  whose  church  is  the  heart  of  man". 

We  have  reached  the  beginning  of  a  period  of  what 
seems  vast  accumulations,  and  the  problems  that  grow  out 
of  it  will  simply  rush  upon  us  within  the  next  few  years. 
These  problems  must  be  met,  and  life  insurance  will  meet 
and  solve  them  first; — and  they  are  not  simple.  It  will 
be  long  before  the  accumulations  of  the  world,  or  the  debt 
of  the  world  contracted  for  a  beneficent  and  peaceful 
purpose,  will  anywhere  near  approach,  if  indeed  they  ever 
do,  the  totals  that  were  wasted  and  squandered  during  the 
destructive  period,  and  yet  the  promise  of  the  hour  is 
something  prodigious,  and  the  greater  the  promise  the 
more  need  of  a  plan  which  shall  meet  this  instinctive  fear 
of  the  people  and  solve  the  problem  of  how  accumulated 
wealth  shall  be  handled.  The  great  source  of  this  accu- 
mulated wealth  will  be  that  thing  with  which  we  deal, 
human  life.  It  is  the  mightiest  force  in  the  world,  when 
taken  in  the  mass  and  considered  in  its  continuity.  Gov- 
ernments are  nothing  to  it,  religions  are  a  matter  of  yes- 
terday. Its  power  is  greater  than  that  of  cannon  and 
battleships  and  dynamite,  even  greater  than  hate.  Hith- 
erto it  has  been  misdirected,  misapplied ;  its  strength  has 
been  squandered  and  its  substance  wasted;  it  has  been 
loaded  with  debts  and  drained  of  vitality.  Yet,  in  spite 


Our  Second  Great  Enemy  57 

of  all,  it  has  kept  up  a  slow  and  certain  progress.  That 
it  has  survived  after  these  years  of  incalculable  waste 
simply  emphasizes  the  splendors  of  the  years  that  are  to 
come  when  this  waste  is  eliminated,  when  the  power  of 
life  is  applied  to  construction.  Greater,  far  greater  than 
all  powers  of  destruction  is  life's  power  of  construction. 
If  this  had  not  been  so,  man  would  long  ago  have  per- 
ished from  the  earth.  The  story  of  this  awful  waste  does 
not  overwhelm  us  because  it  has  been  "writ  in  water", 
we  have  seen  only  a  bit  of  it  at  any  one  time.  Nature 
heals  wounds  quickly;  one  generation  remembers  little 
of  the  generation  before;  and  so  the  old  horror  has  been 
repeated  and  repeated,  and  humanity  has  slipped  back  again 
and  again  to  toil  up  painfully  once  more  over  a  path  already 
many  times  trod.  But  in  constructive  work,  the  whole  story 
is  necessarily  always  before  us.  What  is  destroyed  is 
quickly  forgotten,  but  what  is  built  remains  and  may  not 
be  forgotten.  If  money  is  wasted  it  goes  into  that  form 
of  forgetfulness  that  we  call  public  debt,  but  if  money  is 
saved  it  takes  definite  form  and  must  be  reckoned  with. 
If  lives  are  sacrificed  by  the  hundred  thousand,  well, 
what  of  it,  they  belonged  to  a  previous  generation,  and  we 
get  a  glimpse  of  the  loss  only  when  we  go  to  Arlington 
and  see  miles  of  little  square  headstones,  on  which  there 
is  only  a  number ;  but,  if  lives  are  spared  and  added  to  the 
productive  power  of  the  world,  this  creates  another  prob- 
lem. Let  me  give  one  or  two  concrete  illustrations  of 
what  I  mean:  Frenchmen  to-day  contemplate  a  public 
debt  of  nearly  six  billion  dollars  with  equanimity.  Almost 
all  of  that  debt  was  contracted  in  war;  very  little  of  it 
represents  public  improvements.  That  they  would  be 
uneasy  if  such  a  sum  existed  as  a  common  possession  in- 
stead of  a  common  liability  is  reasonably  certain.  This 
feeling  would  not  be  as  irrational  either  as  it  seems  when 
baldly  stated.  Human  nature  understands  human  nature. 


58  Militant  Life  Insurance 

and  the  danger  that  would  lurk  in  such  a  mass  of  wealth 
as  ordinarily  administered  would  be  a  very  real  thing. 
Or  again:  Suppose  the  present  national  debts  of  the 
world — amounting  to  over  $37,000,000,000 — had  been  con- 
tracted in  constructive  work  instead  of  in  the  work  of 
destruction.  Suppose  that  total  represented  subways  and 
great  highways,  and  public  parks,  and  public  buildings, 
and  scientific  schools,  and  hospitals — suppose  it  had  been 
expended  in  an  attempt  to  help  and  lift  men  up  instead  of 
in  the  composition  of  a  bloody  story  whose  details  make  us 
almost  ashamed  to  be  men.  Can  you  imagine  what  the 
world  would  be?  Can  you  guess  what  would  have  hap- 
pened while  the  expenditure  was  being  made?  Do  you 
think,  under  any  conditions,  people  would  have  voted  the 
expenditures  as  cheerfully  as  they  voted  to  waste  the 
money  and  the  lives  which  this  debt  now  represents  ? 

Your  knowledge  of  human  nature  tells  you  at  once 
that  if  the  nations  had  been  called  on  to  appropriate  such 
sums  for  the  purposes  I  have  suggested,  they  would  have 
halted  and  hesitated  and  haggled.  They  would  have  been 
afraid.  But  why  afraid  ?  There 's  the  rub !  It  certainly 
would  have  been  a  better  use  of  the  money ;  it  would  have 
saved  and  applied  to  the  body  of  human  effort  millions 
of  valuable  lives,  yet  men  who  did  not  hesitate  over  this 
waste  would  have  hesitated  over  the  conditions  we  have 
imagined. 

But  this  imaginary  world  is  coming;  indeed,  in  some 
feeble  sense  is  here  now.  Not  so  much  because  men  have 
ceased  to  kill  each  other,  as  because  the  creative  power  of 
life  through  invention  and  learning  and  through  the 
saving  power  of  life  insurance  is  overtaking  its  destructive 
work  and  promises,  before  the  lapse  of  many  centuries,  to 
overwhelm  it. 

But  the  journey  will  be  long  and  the  task  is  heavy. 
The  enemy  that  threatens  us,  threatens  every  creative 


Our  Second  Great  Enemy  59 

and  conservative  enterprise.  The  fear  that  grips  men's 
hearts  is  not  so  irrational,  because  while  they  readily 
forget  the  story  of  the  past,  its  lesson  rests  in  their  intu- 
itions, and  they  fear  all  forms  of  power  in  which  they 
cannot  see  their  definite  place  and  a  definite  public  con- 
trol. It  took  centuries  to  overcome  the  same  fear  in  the 
establishment  of  free  government.  The  task  is  to  show 
the  world  that  wealth  is  a  beneficent  and  not  a  dangerous 
thing;  to  show  that  present  accumulations  by  contrast 
with  the  waste  of  the  past  are  so  small  as  to  be  almost 
negligible.  But  this  may  not  be  done  by  any  program  that 
fails  to  recognize  the  natural  and  fundamental  rights  of 
man  in  the  wealth  of  the  world— as  the  ballot  recognizes 
his  manhood.  Ordinary  rules  of  business  fall  short. 
Most  legislation  fails,  because  it  tinkers  with  externals. 

Our  program  essentially  harmonizes  with  the  entire 
situation.  It  gives  control — control  already,  in  the  aggre- 
gate, of  more  accumulated  wealth  than  is  gathered  behind 
any  other  modern  idea, — control  that  is  based  on  mutu- 
ality, on  responsibility,  on  a  perfection  of  justice  not 
possible  to  any  other  business  enterprise.  It  gives  place 
to  the  individual,  it  is  based  on  personal  responsibility 
and  self-respect.  It  carries  a  message  to  all  the  world  and 
pays  in  kind  the  obligation  which  humanity  has  placed 
on  us.  It  definitely  husbands  life — that  mighty  thing 
whose  mission  we  guess  at,  whose  power  we  do  not  begin 
to  comprehend.  It  answers  the  question  of  this  fear.  It 
lays  down  a  plan  which,  through  wealth  and  great  accu- 
mulations of  wealth,  will  one  day  make  a  story  as  beauti- 
ful as  the  story  of  the  past  is  sad. 


ADDRESS  OF  WELCOME 


To  MEMBERS  OF  DIAMOND  JUBILEE  CONVENTION,  NEW-YOBK  LIFE  INSURANCE 
COMPANY,  MAT  23,  1905 


MEMBERS  OF  THE  DIAMOND  JUBILEE  CONVENTION: 

;HE  place  of  an  international  gathering  is 
ft  usually  eloquent  of  many  things.  When 
statesmen  met  at  the  Hague  recently,  we 
understood  that  place  to  have  been 
selected  because  it  is  neutral  ground, 
where,  under  the  rules,  each  man  was 
searched  before  admission  and  his  gun 
taken  from  him  and  checked. 

If  an  international  congress  to  con- 
sider standards  of  art  was  to  assemble,  Paris  would  be 
its  natural  meeting  place;  if  a  congress  to  consider  ques- 
tions of  science  or  philosophy  was  to  be  held,  there  could 
be  no  better  place  than  Berlin;  London  would  be  the 
natural  gathering  point  of  an  international  body  met  to 
consider  questions  of  commerce;  and,  if  transportation 
and  modern  business  and  industrial  methods  were  to  be 
discussed,  New  York  City  would  be  the  inevitable  meeting 
place.  There  will  always  be  differences  of  opinion  in 
these  matters,  of  course.  For  example,  Chicago  might 

60 


Address  of  Welcome  61 

dispute  with  Paris  for  supremacy  in  art;  and,  unques- 
tionably, Indiana  would  dispute  the  claims  of  all  other 
states  and  cities  to  supremacy  in  literature.  But  there 
can  be  no  two  opinions  as  to  the  city  and  the  country 
in  which  an  international  congress  of  life  insurance  men 
should  meet.  There  could  be  no  rival  to  New  York  City, 
and,  as  there  is  really  only  one  international  life  insurance 
company,— and  by  that  I  mean  that  there  is  only  one 
Company  which  is  spiritually  as  well  as  physically  inter- 
national,—I  take  it  that  here  and  now  both  the  place  and 
the  congress  are  happily  met.  The  place,  New  York  City, 
the  center  of  that  marvelous  modern  sociological  and  civic 
development  called  life  insurance;  the  Company,  the  New- 
York  Life,  the  most  successful  and  puissant  and  splendid 
exponent  of  the  life  insurance  idea. 

We  are,  indeed,  in  the  very  seat  and  citadel  of  our 
business.  This  was  the  scene  of  the  labors  of  Frederick  S. 
Winston,  and  Henry  B.  Hyde,  and  William  H  Beers ;  and 
here,  or  substantially  here,  live  and  labor  Richard  A. 
McCurdy,  and  John  F.  Dryden,  and  John  R.  Hegeman; 
and  here  live  and  labor  and  lead  those  other  men,  rulers  of 
our  destinies  and  masters  of  our  affections,  George  W.  Per- 
kins and  John  A.  McCall.  With  these  names  life  insur- 
ance, as  a  militant  force,  is  inseparably  connected.  Their 
fame  in  the  field  of  our  labors  will  survive  even  those  oc- 
casional periods  of  moral  cowardice  when  safety  is  sought 
in  ignorance,  when  ability  and  experience  are  disqualifying 
endowments,  when  some  considerable  evils  in  the  manage- 
ment of  a  highly  specialized  business  are,  forsooth,  to  be 
corrected  by  the  benign  labors  of  men  who,  if  suddenly  put 
to  the  test,  couldn't  tell  the  difference  between  a  life  insur- 
ance policy  and  a  bill  of  fare. 

We  meet  to  celebrate,  amongst  other  things,  the  labors 
and  successes  of  a  long  line  of  distinctively  life  insurance 
men.  The  period  of  our  celebration  is  nominally  sixty 


62  Militant  Life  Insurance 

years,  but  the  period  of  real  activity  is  only  forty  years, 
and  the  period  of  astonishing  achievement  is  less  than 
fifteen  years.  The  work  of  this  Company  during  a  half 
generation  surpasses  literally  any  fiction  fashioned  to  en- 
trance the  imagination  of  childhood.  And  amongst  those 
achievements  perhaps  the  greatest  is  the  new  lesson  we  are 
beginning  to  teach  the  world.  This  lesson — and  we  are  met 
to  celebrate  the  triumph  which  this  lesson  shadows  forth— 
is  emphasized  by  the  very  hour  of  our  meeting.  As  we 
meet,  the  whole  world  stands  with  bated  breath  listening 
for  that  awful  crash  of  forces  in  the  far  *East,— a  crash 
which  will  probably  record  in  a  day  losses  in  men  and 
property,  losses  in  ruined  prestige,  losses  through  the  crea- 
tion of  bitter  hatreds  and  plans  for  vengeance,— which  will 
reach  a  total  in  excess  of  what  this  Company  will  accumu- 
late in  the  next  ten  years.  While  stupendous  deeds  of 
destruction,  awful  waste  of  life  and  treasure  do  not  yet 
much  amaze  the  world,  it  is  disposed  to  be  amazed,  and 
after  a  fashion  alarmed,  when  for  the  first  time  it  begins, 
as  it  now  does,  to  realize  that  beneficence  can  be  as  splendid 
as  war,  that  conservatism  can  be  as  mighty  as  ordnance. 
This  new  wonder  we  celebrate,  and  who  may  celebrate  this 
lesson  more  appropriately?  We  celebrate  the  labors  of 
men,  of  a  corporation,  and  of  an  idea  which  move  directly 
against  the  old  order  and  which,  therefore,  are  perpetually 
encountering  new  styles  of  opposition  and  new  elements  of 
danger.  We  teach  the  world  to  transmit  something  besides 
bloody  debts  to  coming  generations,  something  better  than 
legacies  of  hate  growing  out  of  the  bitterness  of  war. 

We  are  just  now  at  a  point  in  the  history  of  life  insur- 
ance when  the  world  hesitates  not  really  because  of  any 
mismanagement,  or  because  of  any  failure,  or  because  of 
anything  wrongfully  done,  but  because  the  proportions  of 
our  empire  have  become  so  great  that  they  fear  it  without 

*Battle  of  Tsu-Shima  Straits. 


Address  of  Welcome  63 

reference  to  what  it  is  or  what  it  does.  Let  me  cite  an 
historic  parallel:  That  events  sometimes  force  the  hands 
of  men  is  the  commonest  fact  in  recorded  history.  This 
people  was  not  ready  for  the  purchase  of  Louisiana  one 
hundred  years  ago.  The  opportunity  was  suddenly  thrust 
upon  Robert  Livingston  and  James  Monroe,  and  they  had 
the  courage  and  the  faith  to  accept  the  challenge.  Their 
act  fixed  forever  the  destinies  of  this  continent,  and  enor- 
mously advanced  the  interests  of  all  mankind.  Yet,  fore- 
bodings of  evil  were  everywhere.  The  undertaking,  it  was 
said,  was  too  huge ;  it  would  make  the  country  unwieldy ; 
the  original  thirteen  states  would  soon  lose  their  predomi- 
nance; there  was  no  power  under  the  Constitution  to  gov- 
ern alien  territory;  our  form  of  government  did  not  lend 
itself  to  such  expansion.  The  prophets  of  evil  (now  for- 
gotten) almost  outnumbered  the  people  who  had  courage 
and  faith.  This  is  singularly  suggestive  of  some  modern 
reflections  on  the  growth  of  life  insurance,  and  especially 
on  the  growth  of  this  Company.  The  hand  of  society  was 
forced  by  life  insurance,  and  the  act  of  Livingston  and 
Monroe  as  between  the  life  insurance  companies  and  the 
public  has  been  repeated  a  thousand  times.  The  founders 
and  fashioners  of  our  great  American  companies  were  men 
of  kindred  fibre,  men  like  Robert  Livingston.  They  saw 
a  vast  opportunity  where  other  men  saw  only  the  wilder- 
ness. They  accepted  the  challenge,  and  American  life  in- 
surance now  presents  to  the  world  achievements  as  sub- 
stantial and  as  glorious  and  as  significant,  too,  not  merely 
for  to-day  but  for  the  future,  as  are  the  great  common- 
wealths which  lie  along  the  valley  of  the  Missouri  and  to 
the  west  of  the  Mississippi. 

We  welcome  you  to  the  official  home  of  a  Company  which 
represents  life  insurance  militant  and  triumphant.  We 
show  you  a  splendid  empire  built  up  within  sixty  years, 
indeed  made  mighty  within  fifteen  years.  It  was  built 


64  Militant  Life  Insurance 

in  such  fashion  as  no  other  kingdom  ever  knew.  Its 
conquests  have  been  distinct  and  unmistakable,  its  dominion 
is  clear  and  unquestioned,  but  in  its  conquests  there  has 
been  no  destruction  and  no  waste,  there  has  been  no  bitter- 
ness, and  there  are  few  regrets.  There  is  in  its  government 
no  question  of  the  laws  of  neutrality  or  of  the  balance  of 
power.  In  some  fashion  it  resembles  the  kingdom  of  the 
church,  which  is  definite  and  comprehensive,  and  only  oc- 
casionally in  history  has  conflicted  with  civil  power. 

We  have  a  right  to  rejoice  in  the  erection  of  this  empire ; 
we  have  a  right  to  be  proud  of  its  extent,  its  superb  organi- 
zation, its  efficiency,  and  its  integrity.  All  these  things  we 
meet  to  celebrate.  We  celebrate  also  that  higher  and  finer 
thing  of  which  we  are  not  always  conscious,  but  which  is 
inevitable  to  the  logical  working  out  of  every  purpose  of 
co-operation:  the  gradual  extinction  of  race  hatred  and 
national  prejudice,  the  gradual  elimination  of  the  elements 
that  make  for  war,  the  gradual  spread  of  that  fine  intelli- 
gence which  finally  comprehends  the  brotherhood  of  man, 
and  aims,  instead  of  creating  fortresses  and  battleships  and 
army  corps,  to  gather  the  products  of  human  labor  into 
great  treasure  houses  which  shall  be  the  fortresses,  not  of 
human  ambition,  but  of  human  hope. 

We  celebrate  a  period;  we  honor  men;  we  pay  our 
tribute  to  an  idea;  we  re-enforce  the  enthusiasm  of  our 
daily  toil  by  clasping  hands  across  the  seas;  we  look  men 
of  strange  blood  and  beliefs  in  the  eye  and  recognize  our 
brothers. 

Gentlemen,  you  are  welcome,  all  welcome! 


HOW  STRONG  IS  THE 
NEW-YORK  LIFE? 


AN  ADDRESS  BEFORE  THE  DIAMOND  JUBILEE  CONTENTION  OF  THE  NEW-YOBK  LIFE 

INSURANCE  COMPANY,  ON  ITS  GOTH  ANNIVERSARY,  MAT  26.  1905. 


HE  New-York  Life  has  all  the  strength  that 
naturally  suggests  itself  when  a  person 
surveys  its  length,  and  breadth,  and 
height,  and  depth,  as  indicated  by  its 
Annual  Statement.  It  has  another  style 
of  strength.  It  has  what  may  be  called 
an  "institutional  strength ".  Our  Com- 
pany is  of  that  type  of  corporations 
which  may  properly  be  classed  as  "Insti- 
tutions'*, and  from  that  standpoint  I  wish  for  a  moment 
to  speak. 

Institutions  are  the  product  of  ideas,  ideas  which  become 
a  part  of  the  fabric  of  life.  Institutions  are  organic.  They 
are  growths,  and  not  instant  creations.  For  example,  the 
common  law  is  an  institution ;  the  Constitution  of  England 
is  an  institution ;  trial  by  jury,  the  ballot,  free  speech,  a  free 
press,  the  family,  language,  government  itself,— all  of  these 
are  institutions.  Each  was  established  only  after  years  of 
struggle ;  each  was  the  product  of  an  idea. 

Life  Insurance  is  an  institution.     It  sprang  from  an 

65 


66  Militant  Life  Insurance 

idea.  It  may  have  been  helped  by  written  law,  but  the 
instances  in  which  it  has  been  injured  are  so  many  that  it 
is  doubtful  whether,  upon  the  whole,  it  has  been  helped 
or  injured  thereby. 

Life  Insurance  strikes  deeper  than  statutes  and  reaches 
farther.  It  has  grown  with  modern  life,  and  grown  most 
rapidly  where  life  has  grown  best.  It  now  reaches  millions 
of  homes,  touches  all  the  great  centers  of  financial  faith, 
and  carries  in  its  treasure  vaults  a  peace  commission 
armed  with  more  power  than  centers  at  the  Hague. 

The  Company  whose  splendid  development  we  celebrate 
is  in  itself  an  institution;  it  answers  all  the  conditions  of 
the  most  exacting  definition ;  in  fact,  it  is  three  institutions. 
Its  field  force  is  an  institution,  its  office  force  is  an  institu- 
tion, and  its  assets  are  an  institution. 

How,  you  ask,  are  the  assets  an  institution?  They  are 
an  institution  because  they  are  the  result  of  growth,  the 
result  of  an  organic  idea,  the  result  of  the  operations  of 
natural  law,  the  result  of  a  plan  which  affects  civilization 
and  inherently  reaches  farther  into  the  past  and  more 
certainly  controls  the  future  than  almost  any  other  idea 
now  molding  human  affairs. 

The  assets  of  the  New- York  Life  are  like  the  spreading 
oak,  which  grips  the  earth  deeply  and  silently,  while  de- 
lighting the  eye  with  splendid  strength  and  offering  gen- 
erous protection  from  the  heat  of  noonday.  The  oak 
grows  slowly;  therein  is  its  strength.  Real  strength  is  not 
a  quality  of  trees  that  grow  quickly.  Full  grown  it  is 
possible  to  kill  the  oak  almost  instantly;  it  can  be  cut 
down,  but  it  is  not  possible  quickly  to  reproduce  it  by  any 
process  whatever.  The  assets  of  this  Company  are  a  gigantic 
oak.  They  have  grown ;  they  were  tended  and  watched  and 
fertilized  by  the  devotion  and  thought  and  anxiety  and 
ability  of  Ogden,  and  Merchant,  and  Franklin,  and  Beers, 
and  Appleton,  and  Gibbs,  and  that  splendid  body  of  living 


How  Strong  is  the  New-York  Life  67 

men  who  carry  forward  the  work.  Its  roots  reach  every 
soil  of  earth;  its  leaves  cast  their  shade  in  every  land.  As 
well  by  some  magic  attempt  to  reproduce  the  oak  in  an 
hour  as  by  any  known  process  to  duplicate  these  assets. 
We  are  apt  to  think  of  our  securities  as  something  that  can 
be  sold  to-morrow.  Perhaps  they  could,  but  that  is  not  a 
practical  question.  That  they  will  never  be  quickly  sold 
is  one  element  of  strength  not  generally  recognized.  We 
do  not  often  think  of  the  other  view,  namely,  could  they  be 
duplicated  to-morrow?  Could  they  be  duplicated  at  all? 
Could  they  be  duplicated  with  unlimited  money  within  any 
reasonable  length  of  time?  I  maintain  that  with  any  re- 
sources practically  available  in  this  world,  no  man,  for 
twice  the  sum  represented,  could  duplicate  our  assets.  There 
is  more  than  value  in  the  list;  there  is  life,  there  are  lives, 
there  is  growth,  history,  and  that  rare  strength  that  goes 
with  institutional  development.  Their  splendid  proportions 
are  the  result  of  layer  on  layer  of  growth,  the  sixty  rings  of 
sixty  Annual  Statements.  They  are  not  merely  unrelated 
things  of  value,  they  are  coherent  parts  of  a  magnificent 
whole.  Their  chief  strength  lies  not  so  much  in  their 
ability  to  meet  current  obligations  as  in  their  example  to 
the  world :  a  solid  front  of  conservatism ;  their  demand  for 
that  commercial  faith  on  which  all  civilization  rests;  their 
protest  against  war  and  all  manner  of  crimes;  their  elo- 
quent proof,  by  the  mere  fact  that  they  exist,  that  there  are 
more  reasons  for  peace  than  for  conflict  between  men.  These 
assets  teach  that  prudence  can  be  as  splendid  as  war;  that 
co-operation  can  yield  a  product  which  touches  the  imagi- 
nation as  sharply  as  an  army  with  banners. 

With  millions,  men  can  quickly  create  what  they  call 
colleges;  but,  with  unlimited  millions,  they  cannot  buy 
traditions  and  great  names  and  the  atmosphere  that  touches 
a  boy's  heart  and  awakens  his  soul.  Even  so,  four  hundred 
millions,  gathered  through  sixty  years,  carry,  in  every  page 


68  Militant  Life  Insurance 

that  records  their  acquisition,  history  and  traditions,  and 
deep  lessons  of  faith,  the  inspiration  of  great  names,  and  an 
atmosphere  that  can  by  no  possibility  be  instantly  pro- 
duced or  indeed  reproduced  at  all. 

I  have  compared  the  body  of  assets  to  the  sixty  rings 
in  the  tree,  representing  sixty  Annual  Statements.  Let  me 
give  you  briefly  a  few  facts  that  will  indicate  how  this 
growth  has  taken  place,  and  the  process  by  which  we  have 
arrived  at  what  we  have.  Let  us  glance  over  the  past  ten 
years.  In  1895,  the  Finance  Committee  considered  $134,- 
000,000  in  securities,  and  out  of  the  offerings  selected  and 
purchased  $11,000,000;  in  1900,  they  considered  $141,- 
000,000,  and  purchased  $25,000,000;  in  1903,  they  consid- 
ered $394,000,000,  and  purchased  $47,000,000;  in  1904, 
they  considered  $426,000,000,  and  purchased  $88,000,000. 
In  eleven  years,  they  have  considered  $2,000,000,000,  and 
have  purchased  $391,000,000.  The  transactions  of  the 
Committee  in  1894  amounted  in  round  numbers  to  $31,- 
000,000 ;  in  1904  to  $140,000,000.  But  all  this  activity  has 
been  a  part  of  the  history  of  the  time  and  of  the  hour. 
Securities  have  been  offered,  history  in  connection  with 
those  securities  has  been  made,  the  Company  has  bought 
and  put  away  in  its  vaults  what  seemed  good.  Time  has 
rolled  on.  The  transactions  of  the  Finance  Committee  from 
year  to  year  have  been  like  the  transactions  of  a  government. 
They  are  irrevocable,  and  are  part  of  what  we  are  and 
what  we  are  to  be.  Indeed,  their  chief  effects  lie,  necessa- 
rily, in  their  influence  on  the  future.  They  are  the  encir- 
cling rings  of  the  oak.  They  represent  not  merely  a  year's 
work,  but  a  part  of  a  completed  yet  constantly  growing 
body  which  cannot  be  reversed  or  changed.  Let  me  give 
you  some  different  points  of  view  illustrating  not  only  how 
far  the  roots  of  this  mighty  tree  go  into  the  soil  of  the 
past,  but  how  superbly  its  great  branches  lift  up  into  the 
sunlight. 


How  Strong  is  the  New-York  Life  69 

Of  the  bonds  owned  by  the  Company  on  the  first  of 
January  last,  $209,000  (cost  value)  have  been  owned  since 
before  1879 ;  $8,700,000  were  bought  between  1879  and  1884 ; 
$16,000,000  between  1884  and  1889;  $21,000,000  between 
1889  and  1894;  $57,000,000  between  1894  and  1899,  and 
$185,000,000  since  1899. 

Or  again,  taking  the  forward  look:  Of  these  same 
bonds,  $21,000,000  are  irredeemable ;  the  periods  of  maturity 
of  $1,000,000  more  run  from  one  hundred  to  five  hundred 
years;  the  maturity  of  $51,000,000  comes  at  points  from 
fifty  to  one  hundred  years  hence;  of  $74,000,000  between 
forty  and  fifty  years  hence;  of  $34,000,000  between  thirty 
and  forty  years  hence ;  of  $35,000,000  between  twenty  and 
thirty  years  hence ;  of  $37,000,000  between  ten  and  twenty 
years  hence;  and  $36,000,000  mature  within  the  next  ten 
years.  Here  are  more  securities  maturing  between  the 
middle  and  the  end  of  the  century  than  mature  within  ten 
years.  The  largest  group  in  this  arrangement,  $74,000,000, 
finds  its  maturity  nearly  two  generations  in  the  future. 
What  an  object  lesson.  How  these  assembled  products  of 
affection  and  labor  pierce  the  shadows  and  the  mysteries 
of  the  future  and  bring  assurance  and  comfort  to  countless 
hearts  otherwise  torn  with  anxiety.  Here  is  something  that 
lies  in  the  future,  and  yet  is  almost  as  definite  and  as  cer- 
tain as  that  which  is  already  within  the  pages  of  irrevocable 
history.  Therefore,  I  say,  while  we  rejoice  in  the  great 
achievements  of  the  past,  let  us  also  grasp  something  of  what 
lies  in  the  future.  Let  us  better  understand  that  what  our 
forebears  did,  what  we  do,  is  not  merely  something  done 
and  finished.  Because  we  are  an  Institution,  because  we 
have  almost  wholly  to  do  with  the  problems  of  the  future, 
all  that  has  been  done  and  all  that  we  do  are  a  living  force, 
—something  done  and  yet  just  beginning.  We  are,  in  short, 
an  Institution,  older  than  men  of  full  years,  and  younger 
than  the  soul  that  alighted  here  yesterday. 


THE  DRIVING  POWER  OF  LIFE 
INSURANCE 


FROM  THE  NOVEMBEB  NUMBEB  OF  THE   "REVIEW  OP  REVIEWS",  NEW  YOBK.   1905. 


HE  great  American  life  insurance  com- 
panies have  moved  with  the  spirit  of 
the  age.  They  have  made  mistakes,  but 
they  have  not  trifled.  They  have  some- 
times followed  bad  judgment,  but  they 
have  worked  incessantly.  In  common 
with  every  great  organized  human  en- 
terprise, they  have  occasionally  devel- 
oped incompetent  and  dishonest  men; 
but,  on  the  other  hand,  the  extent  and  quality  of  their 
achievements  show  to  the  satisfaction  of  every  fair  mind 
that  fine  integrity,  as  well  as  ability  of  a  high  order,  has 
controlled  and  guided  them  first  and  last.  Upon  the 
whole,  they  have  kept  pace  with  the  very  best  develop- 
ments of  a  marvelous  age. 

The  thing  to  consider  in  estimating  the  work  of  these 
companies  is  not  chiefly  what  mistakes  they  have  made, 
or  wherein  they  have  been  wrong,  although  in  a  life 
insurance  company  mistakes  and  wrongdoing  are  sub- 
jects for  more  serious  consideration  than  in  any  other 


70 


The  Driving  Power  of  Life  Insurance  71 

style  of  corporation.  Still,  the  real  question  to  consider 
is,  What  have  the  companies  really  done?  Has  it  been 
worth  while?  Has  it  added  something  to  the  sum  of 
human  comfort  and  human  advancement?  Does  it  over- 
top and  overwhelm  the  errors,  the  bad  judgment,  which 
are  admitted? 

Let  us  glance  at  a  few  of  the  things  that  three  companies 
located  in  New  York  City  have  done  alone  within  ten 
years : 

First. — They  have  induced  millions  of  people,  drawn 
from  every  race,  religion,  and  nationality,  to  forget  their 
prejudices  and  remember  their  duties.  Co-operating 
under  a  system  of  mutual  protection  and  investment, 
these  people  have  paid  in  cash  into  a  common  fund  more 
than  $1,400,000,000. 

Second. — They  have  made  their  invested  funds  earn 
over  $377,000,000. 

Third. — They  have  paid  claims  by  death  amounting  to 
over  $430,000,000. 

Fourth. — They  have  paid  other  benefits  to  policy- 
holders  amounting  to  over  $365,000,000. 

Fifth. — They  have  paid  altogether  to  the  policy- 
holders  more  than  $796,000,000. 

Sixth. — They  have  in  ten  years  increased  the  number 
of  people  insured  by  over  1,200,000. 

Seventh. — They  have  added  to  the  amount  of  the 
insurance  protection  of  the  world  nearly  $2,400,000,000. 

Eighth. — They  have  increased  their  resources  by  over 
$696,000,000,  and  now  hold  over  $1,244,000,000  for  the 
security  and  ultimate  payment  of  their  contracts. 

Ninth. — They  have  over  2,100,000  living  contracts, 
which  will  provide  their  holders,  in  case  of  death,  with 
nearly  $5,000,000,000. 

Tenth. — By  their  energy  and  desire  to  enforce  the 
principle  of  mutuality,  they  have  reformed  the  life  insur- 


72  Militant  Life  Insurance 

ance  contracts  of  the  world.  The  life  policy  of  to-day  is 
as  unlike  the  policy  of  a  few  years  ago  as  the  machinery 
of  the  modern  cotton  factory  is  unlike  the  old  spinning- 
jenny.  As  the  result  of  this — 

Eleventh. — They  have  increased  loans  to  their  policy- 
holders,  which  ten  years  ago  amounted  to  $5,000,000,  to 
over  $86,000,000  at  the  end  of  1904. 

Twelfth. — Two  of  the  three  companies  have  devised 
thoroughly  scientific  methods  of  insuring  sub-standard 
lives.  One  of  the  three  within  nine  years  has  issued  and 
placed  $190,000,000  of  insurance  on  lives  more  or  less 
impaired,  lives  on  which  little,  if  any,  insurance  could 
have  been  obtained  elsewhere.  This  was  as  distinct  an 
achievement,  as  definite  an  addition  to  the  sum  of  human 
helpfulness,  as  a  discovery  in  medical  science  or  improve- 
ments in  methods  of  transportation  would  be.  Only  a 
large  company  could  have  done  it ;  only  a  large  company, 
and  the  spirit  that  made  it  large,  would  have  done  it. 

Thirteenth. — In  spite  of  all  criticism,  there  is  not  the 
slightest  doubt  in  the  mind  of  any  intelligent  man  of 
their  solvency,  of  the  existence  of  large  surpluses,  and  of 
their  ability  to  meet  obligations  greatly  in  excess  of  all 
liabilities. 

Fourteenth. — At  the  present  time,  they  are  paying  on 
deferred-dividend  contracts,  maturing  during  the  lifetime 
of  the  insured,  from  20  to  100  per  cent,  more  than  is  guar- 
anteed in  the  contract  itself. 

Fifteenth. — The  ratio  of  expenses  to  premium  receipts, 
notwithstanding  an  enormously  greater  new  business,  was 
less  in  1904  than  it  was  in  1894. 

Sixteenth. — The  ratio  of  expenses,  taking  into  account 
the  new  business  done,  is  less  than  that  of  the  smaller 
companies. 

Seventeenth. — Finally,     they     have     handled     nearly 


The  Driving  Power  of  Life  Insurance  73 

$2,000,000,000  in  cash  with  losses  through  faults  of  admin- 
istration so  small  that  it  is  hardly  possible  to  make  a  ratio. 

These  results  are  large,  but  they  are  more  wonderful 
for  their  quality  than  for  their  size.  They  have  been 
achieved  through  the  methods  of  ordinary  business,  by 
dealings  with  men  in  the  general  world  of  affairs.  These 
methods  are  now  under  fire.  The  criticisms  run  along 
these  lines: 

We  are  told  that  a  company  should  have  no  agents. 
As  well  attempt  to  establish  a  church  without  preachers. 
Few  people  go  directly  to  a  church  and  ask  to  be  enrolled. 
Few  people  will  go  to  a  life  insurance  company  and  ask 
membership.  The  reason  is  the  same  in  each  case.  No  re- 
ligion has  ever  reached  and  served  humanity  without  organi- 
zation, without  devotees,  without  the  contagious  example  of 
enthusiastic  advocates.  No  life  insurance  company  has  ever 
achieved  anything  worth  while  without  driving  its  prin- 
ciples home  through  men — through  agents.  The  attempt 
has  been  frequently  made  to  do  a  life  business  by  intel- 
lectual processes  merely.  The  result  has  always  been  re- 
spectable inanition.  There  is  a  sort  of  Unitarianism  in  life 
insurance.  There  is  also  a  Methodism;  and  the  fire  of 
Roman  Catholicism.  The  great  companies  are  all  akin,  in 
their  methods,  to  the  aggressive  churches.  They  have 
followed  the  same  methods,  and,  in  their  determination  to 
reach  the  people,  they  may  even  be  said  at  times  to  have 
been  as  undignified  and  as  useful  as  the  Salvation  Army. 

We  are  told  that  the  deferred-dividend  plan  is  vicious. 
Yet  it  has  been  as  effective  in  propagating  this  gospel  as 
the  doctrine  of  rewards  and  punishments  has  been  in 
spreading  Christianity.  It  has  been  effective  because  it 
meets  most  perfectly  the  two  functions  of  good  life  insur- 
ance,—protection  for  dependents  and  protection  against 
advancing  age.  The  second  is  just  as  legitimate  and  just 
as  necessary  as  the  first.  Under  the  deferred-dividend  plan, 


74  Militant  Life  Insurance 

men  agree  to  help  one  another  as  against  advancing  age, 
just  as  they  agree  to  help  one  another,  through  insurance, 
as  against  the  contingency  of  death.  Insurance  is  neces- 
sary because  no  man  knows  when  he  will  die;  he  cannot 
afford  to  take  the  risk  alone.  Just  as  no  man  knows  who 
of  a  group  of  men  will  die  within  twenty  years,  so  no  man 
knows  who  of  a  group  will  live  twenty  years.  All  who 
live  beyond  that  period  will  have  moved  a  long  way  to- 
ward that  part  of  life  where  physical  and  mental  weakness 
begins.  Here  is  a  hazard  and  a  weakness  as  definite  as 
the  hazard  of  death.  By  co-operation  in  the  use  and  dis- 
tribution of  surplus  payments  and  earnings  and  mortality 
savings,— which  is  only  another  way  of  describing  the 
deferred-dividend  system, —  men  measurably  meet  this 
hazard.  The  system  is  juster,  stronger,  more  attractive, 
and  more  efficient  than  the  system  which  distributes  sur- 
plus annually.  It  appeals  to  men.  It  furnishes  capital 
with  which  to  spread  the  gospel  of  insurance.  It  has  done 
more,  perhaps,  than  any  other  single  device  to  make  life 
insurance  the  factor  it  has  come  to  be  in  the  economic 
development  of  the  world. 

We  are  told  that  the  business  has  cost  too  much.  Gen- 
erally speaking,  it  has  cost  most  in  the  companies  that 
have  done  least.  The  test  applied  by  current  criticism  is 
to  find  out  what  the  ratio  is  between  expenses  and  total 
income.  This  ratio  is  supposed  by  its  size  to  indicate  ex- 
travagance or  economy.  As  a  matter  of  fact,  there  are 
few  tests  so  inconclusive,  few  that  prove  so  little  as  to  the 
wisdom  or  unwisdom  of  a  company's  management.  This 
ratio  is  certain  to  be  high  in  any  active,  successful  com- 
pany, however  wisely  managed.  This  arises  from  the  fact 
that  while  new  business  ultimately  pays  its  own  acquisi- 
tion expense  and  is  not  a  charge  on  business  done  in  pre- 
vious years,  still  the  initial  expense  always  exceeds  the 
expense-loading  in  the  first  year's  premium.  Practically 


The  Driving  Power  of  Life  Insurance  75 

all  new  business  anticipates  and  uses  some  portion  of  the 
loading  of  future  premiums.  The  loading  is  added  for 
that  purpose.  The  portion  anticipated  is  returned  as 
future  premiums  are  paid;  but  it  follows  inevitably  that 
a  large  new  business,  however  soundly  done,  means  that 
this  style  of  ratio  will  be  high.  A  company  in  which  this 
ratio  is  25  per  cent,  may  be  managed  wisely ;  and  another 
in  which  this  ratio  is  18  per  cent,  may  be  managed  extrav- 
agantly ;  and  another  in  which  the  ratio  is  only  10  per  cent, 
may  be  paying  excessive  prices  for  business.  The  real 
question  is:  What  does  a  company  get  for  the  money 
it  spends  ?  If  a  company  spends  25  per  cent,  of  its  income 
in  a  year  and  gets  in  return  a  large,  well-selected  business, 
done  under  reasonable  contracts  with  agents,  it  has  done 
well,  it  is  growing — growing  both  in  strength  and  use- 
fulness. If  a  company  spends  18  per  cent,  of  its  income 
annually  and  gets  a  very  small  business,  done  under  ex- 
travagant contracts  and  haphazard  management,  it  has 
not  done  well — it  is  not  growing  either  in  strength  or  use- 
fulness. If  a  company  spends  only  10  per  cent,  of  its 
income  annually,  that  fact  alone  is  almost  conclusive 
proof  that  it  is  passing  into  a  condition  of  inanition  and 
relative  uselessness.  The  little  business  that  such  a  com- 
pany does  is  likely  to  be  done  at  a  heavier  cost  than  the 
business  done  by  a  company  with  a  virile  organization. 
Sound  organization  generally  means  economy;  success 
breeds  success.  A  just  study  of  expenses  must  include  a 
consideration  of  what  expenditure  brings.  In  the  great 
companies,  it  has  brought  enormous  development,  the 
widest  usefulness,  the  vigor  of  an  almost  immeasurable 
strength,  and  returns  to  the  insured  which  with  proper 
allowance  for  the  cost  of  indemnity  surpass  the  returns 
realized  during  the  same  time  on  conservative  invest- 
ments. The  ratio  under  discussion  is  higher  here  than 
abroad  because  of  the  larger  relative  volume  of  business 


76  Militant  Life  Insurance 

done  here.  It  is  higher  now  than  it  was  thirty  years  ago, 
chiefly  because  of  the  greater  activities  of  the  companies, 
their  rapid  growth  and  increasing  usefulness  through  the 
acquisition  of  new  business. 

We  are  told  that  premiums  are  too  high.  This  indicates 
a  short  memory.  We  are  just  clear  of  a  period  in  the  de- 
velopment of  life  insurance  full  of  scandals,  losses,  and 
sufferings,  caused  by  attempts  to  do  business  with  inade- 
quate premiums.  Assessment  insurance  flourished  on  the 
cry  that  the  level-premium  companies  were  robbers;  but 
the  operation  of  a  law  as  inexorable  as  the  law  of  gravita- 
tion answered  all  such  charges  and  shut  the  doors  of  all 
such  enterprises.  Premium  rates  are  singularly  uniform  all 
over  the  world.  They  have  been  arrived  at  by  using  both 
theory  and  practice.  They  have  not  to  any  extent  been  fixed 
by  agreement.  The  surprising  fact,  as  against  this  criticism, 
is  that  rates  are  lowest  where  life  insurance  is  most  vig- 
orous, where  "expenses",  so  called,  are  heaviest.  The 
rates  of  the  great  American  companies  are  lower  than  the 
rates  of  the  English  or  the  German  or  the  French  com- 
panies. For  example,  the  rate  charged  for  a  life  policy 
at  age  35  by  the  New-York  Life  is  $28.11 ;  by  the  Gotha, 
of  Germany,  $29.60;  by  the  Equitable,  of  London  (which 
employs  no  agents),  $29.92;  by  the  Generale,  of  France, 
$30.70.  A  sufficient  premium  rate  is  the  very  foundation 
of  life  insurance.  That  the  great  companies  have  not  cut 
rates  in  the  keen  competition  for  business  shows  that  they 
have  not  made  such  a  god  of  new  business  as  the  critics 
of  the  hour  claim.  To  reduce  premiums  would  be  the 
first  device  of  weakness,  the  first  resort  of  irresponsible 
ambition.  With  a  falling  rate  of  interest,  with  the  adop- 
tion of  more  equitable  and  liberal  policy  conditions,  pre- 
mium rates  in  this  country  have  steadily  moved  toward 
a  higher  level.  It  would  be  as  fatuous  to  fix  a  maximum 
premium  rate  by  law  as  it  would  have  been  to  fix  the  rela- 


The  Driving  Power  of  Life  Insurance  11 

tive  value  of  gold  and  silver  by  law.  France  is  about  to 
fix  a  minimum  premium  rate.  She  proposes  to  see  that  no 
company  makes  less  than  an  adequate  charge.  The  new 
French  rates,  which  are  the  result  of  most  careful  study, 
will  probably  be  in  excess  of  any  corresponding  rates 
used  in  this  country. 

We  are  told  that  the  companies  have  gone  mad  in  their 
desire  for  mere  bigness.  An  explanation  of  the  growth  of 
these  companies  involves  more  than  ambition,  more  than 
the  impetus  of  vanity.  It  involves  an  appreciation  of  an 
unparalleled  opportunity  and  the  inspiration  that  nat- 
urally comes  from  such  an  outlook.  Even  Standard  Oil 
cannot  be  explained  without  making  a  large  allowance  for 
brains  and  hard  work. 

We  are  told  that  the  growth  of  the  companies  must  be 
limited  by  law.  If  an  intelligent  supervision  and  a  sound 
system  of  accountability,  exercised  by  the  State  or  by  the 
federal  government,  results  in  checking  the  growth  of 
life  insurance  companies,  no  one  will  complain.  But  if 
we  fix  limits  which  paternally  kill,  why  not  paternally 
say  that  people  shall  have  only  so  many  hospitals,  only  so 
many  schools,  only  so  much  sunshine?  Any  plan  which 
aims  to  kill,  and  not  rationally  to  regulate,  must  be  in 
effect  a  declaration  that  co-operation,  the  great  hope  of 
the  modern  world,  has  broken  down  utterly  in  its  first 
trial.  It  has  not  broken  down,  but  it  may  be  possible  to 
break  it  down.  The  whole  matter  will  adjust  itself  with- 
out paternal  interference.  It  is  probable  that  the  top  of 
the  curve  expressing  the  growth  of  the  great  life  com- 
panies has  already  been  passed.  The  margin  of  insurance 
added  each  year  over  insurance  lost  from  all  causes  is 
already  growing  smaller.  With  any  rational  limitation 
of  expenses,  this  margin  will  very  probably  soon  be  wiped 
out.  This  would  mean  the  limit  of  a  company's  growth 
in  the  matter  of  outstanding  insurance,  and  would  in  turn 


78  Militant  Life  Insurance 

necessarily  fix  a  limit  to  the  assets.  There  could  be  no 
objection  to  a  limitation  achieved  in  that  way. 

We  are  told  that  we  should  have  a  standard  policy  form. 
Why  not  paternally  legislate  that  all  women  should  wear 
dresses  of  the  same  color,  made  after  the  same  pattern? 
It  would  be  as  American  and  as  rational. 

We  are  told  that  such  great  accumulations  of  money  are 
dangerous.  Public  debts  vastly  in  excess  of  these  accumu- 
lations do  not  seem  to  alarm  us.  The  waste  of  the  last 
eighteen  months  in  Manchuria  surpasses  by  more  than 
two  to  one  the  combined  accumulations  of  the  three  great 
companies  at  the  end  of  sixty  years.  Is  waste,  and  loss, 
and  debt,  then,  a  better  thing  than  prudence,  and  savings, 
and  the  vast  conservative  force  which  these  assets  repre- 
sent? 

None  of  these  criticisms  really  express  a  comprehensive 
knowledge  of  what  life  insurance  is,  or  why  these  three 
companies  have  made  such  enormous  successes.  Few  of 
the  suggested  reforms  are  of  value,  because  nearly  all  of 
them  assume  that  there  is  something  inherently  wrong  or 
evil  in  life  insurance  itself. 

A  brief  consideration  of  the  fundamental  ideas  and 
moving  forces  which  lie  back  of  this  development  will 
give  us  a  better  view  of  what  life  insurance  really  means. 

Life  insurance  is  first  of  all  a  conviction.  The  insurant 
is  almost  always  a  convert.  The  man  who  directs  a  life 
company  with  any  measure  of  success  is  always  full  of 
moral  as  well  as  physical  energy.  No  man  can  understand 
life  insurance  and  believe  in  it  and  preach  it  effectively 
who  does  not  feel  its  driving  power.  The  genuine  life- 
insurance  man  is  a  descendant  of  those  men  who  have 
through  all  history  accomplished  something,  acting  under 
the  force  of  an  impulse  which  is  as  much  moral  as  mental. 

The  idea  of  life  insurance  implies,  not  merely  a  duty 
to  dependents,  but  a  duty  to  other  men.  Life  insurance 


The  Driving  Power  of  Life  Insurance  79 

deals  with  human  life,  and  human  life  is  the  most  im- 
portant fact  within  the  range  of  human  knowledge.  All 
organized  society  is  an  attempt,  in  some  form,  to  advance 
the  condition,  to  improve  the  outlook,  to  husband  the 
power  of  human  life.  Governments  are  human  life  pro- 
tecting, guarding,  and  developing  itself.  Religions  are 
human  life  struggling  with  the  problems  of  origin  and 
end.  Philosophies,  from  the  Epicurean  to  the  Spencerian, 
deal  with  the  same  problem. 

Life  insurance  differs  from  all  other  attempts  to  con- 
serve and  protect  human  life  in  that  it  realizes  from  the 
outset  the  thing  of  supreme  value.  Indirectly,  it  seeks  to 
advance  the  interests  of  the  world  through  sound  morals 
and  sound  finance  and  good  hygiene  and  all  rational 
agencies;  but,  directly,  it  cuts  across  all  ordinary  pro- 
cesses and  boldly  declares  that  the  one  thing  of  supreme 
value  in  this  world  is  human  life.  With  this  it  deals 
direct,  just  as  the  merchant  deals  with  merchandise  and 
the  philosopher  with  his  dreams.  Dealing  with  this  pre- 
cious material,  what  ought  its  ambitions  to  be?  What 
should  it  seek  to  accomplish?  What  ought  its  develop- 
ment to  be  ?  What  ideals  should  it  have  ? 

Most  human  enterprises  are  restricted  by  material  or 
by  opportunity.  Life  insurance  has  no  such  limitations. 
Prom  the  beginning,  it  faced  a  universal  need;  it  dealt 
with  the  source  of  all  values.  The  wonder  is,  not  that 
great  things  have  come  out  of  the  life  insurance  idea,  but 
rather  that  they  did  not  come  sooner.  Its  ambition  could 
not  be  small.  What  it  aimed  to  do,  if  well  done,  could  not 
be  unimportant.  Any  real  development  must  involve 
great  numbers  of  men  and  great  values.  Ideals  which 
could  inspire  a  wise  leadership  in  such  an  undertaking 
must  be  high. 

The  growth  of  a  few  life  insurance  companies  is  per- 
haps the  most  striking  feature  in  an  age  full  of  remark- 


80  Militant  Life  Insurance 

able  activities.  Most  of  the  giants  of  modern  corporate 
life  are  the  result  of  amalgamation  and  combination. 
They  are  huge,  but  their  parts  existed  before.  This  is 
particularly  true  of  the  great  railroad  systems  and  the 
great  industrial  enterprises.  The  tremendous  expansion 
of  certain  life  companies  within  recent  years  has  been  a 
distinct  achievement.  The  development  has  been  genuine 
growth.  The  fact  that  one  company  in  six  years  added 
to  its  outstanding  insurance  a  thousand  million  dollars, 
a  sum  equal  to  its  outstanding  insurance  fifty-four  years 
after  its  organization,  makes  a  startling  contrast  in 
achievement;  and  that  the  last  billion  of  insurance  was 
secured  at  a  saving  of  $20,000,000  over  the  cost  of  the  first 
billion  makes  an  even  more  startling  contrast  in  methods. 

The  life  companies  which  have  had  this  prodigious 
growth  have  not  had  an  easy  time, — the  result  was  no 
accident.  They  have  had  to  face  all  the  problems  and  all 
the  difficulties  that  have  confronted  other  corporations. 
They  have  had  to  do  pioneer  work.  In  carrying  the 
gospel  of  life  insurance  to  foreign  lands,  to  countries 
where  our  ideas  on  the  subject  were  almost  unknown, 
where  conditions  were  naturally  hostile,  they  have  dupli- 
cated much  of  the  story  of  the  early  conquest  of  our  own 
country. 

They  have  been  pioneers,  too,  in  another  field.  They 
have  first  presented  to  the  country  generally,  in  concrete 
form,  a  definite  expression  of  what  co-operation  and  the 
modern  way  of  doing  things  really  involve.  The  ordinary 
man  was  not  ready  for  this.  He  believed  in  co-operation ; 
he  believed  that  thereby  his  condition  would  be  bettered ; 
that  he  could  eliminate  waste  and  do  away  with  much 
injustice.  He  did  not  understand,  however,  what  it  meant 
to  have  a  million  men  combine  for  a  definite  purpose,  run- 
ning through  a  period  of  years.  He  wanted  the  product 
of  co-operation,  but  with  the  processes  necessary  to 


The  Driving  Power  of  Life  Insurance  81 

achieve  that  product  he  is  even  now  not  familiar.  He  is 
more  or  less  afraid  of  his  own  program  when  it  takes 
practical  form. 

There  are  real  dangers  attending  all  pioneer  work. 
The  men  who  settled  the  Ohio  Valley,  the  men  who  dis- 
covered Oregon,  made  a  contribution  to  the  sum  of  human 
advancement  and  human  comfort  that  is  literally  beyond 
all  calculation;  but  in  doing  it  they  faced  very  real  dan- 
gers. It  would  be  difficult  to-day  to  find  any  one  who 
would  say  that  what  they  undertook  was  not  worth  while 
because  it  was  attended  with  severe  effort.  The  great 
American  life  companies,  responding  to  the  opportunity 
and  to  what  may  be  called  the  driving  power  of  the  life 
insurance  ideal,  faced  most  complex  problems  when  they 
went  beyond  the  borders  of  their  own  country  carry- 
ing this  gospel.  They  faced  real  dangers  as  they  devel- 
oped in  their  own  country,  dangers  which  will  measurably 
disappear  as  the  people  come  to  comprehend  the  vast 
beneficence  which  these  companies  have  already  wrought, 
the  vaster  work  which  they  must  do,  and  when  they  come 
to  understand,  in  addition  that  co-operation  does  not 
mean  a  smaller  world,  but  a  larger  one;  not  less  power, 
but  more;  not  a  simpler  civilization,  but  one  vastly  more 
complex. 

One  of  the  current  questions  is  whether  the  companies 
were  justified  in  facing  these  dangers  aggressively? 
Wouldn't  it  have  been  better  to  let  things  drift? 
Wouldn  't  it  have  been  easier  to  wait  ? 

But  suppose  George  Rogers  Clark  had  waited  instead 
of  marching  on  Kaskaskia  and  Vincennes?  Suppose 
Eobert  Livingston  and  James  Monroe  had  shuffled  over 
Louisiana  in  1803  ?  Suppose  Lewis  and  Clark  had  delayed 
in  fixing  our  title  to  the  Oregon  country?  Suppose  any 
of  our  great  opportunities  as  a  nation  had  been  faced 
flabbily  instead  of  aggressively? 


82  Militant  Life  Insurance 

That  the  verdict  concerning  the  pioneers  and  fighting 
leaders  in  life  insurance  will  finally  be  exactly  what  it  is 
now  with  regard  to  the  great  pioneers  who  so  mightily 
influenced  our  destinies  as  a  country  is  as  certain  as  the 
future  progress  of  the  race.  Just  now,  however,  we  are 
face  to  face  with  one  of  the  periods  of  doubt  and  hesita- 
tion in  the  public  mind.  This  arises — first,  from  the  unfa- 
miliarity  of  the  public  with  such  colossal  results;  and, 
second,  from  the  development  in  the  management  of  these 
enterprises  of  that  weakness  which  can  be  traced  in  every 
human  enterprise,  a  weakness  which  seldom  if  ever  strikes 
very  deep,  and  never  seriously  retards  the  progress  of 
events. 

Striking  illustrations  of  the  present  attitude  of  people 
toward  life  insurance  are  to  be  found  in  the  frequent  ref- 
erences now  made  to  the  Equitable  Life  Assurance  So- 
ciety of  London,  and  to  a  gentleman,  lately  deceased, 
who  was  for  thirty-five  years  the  President  of  the  Con- 
necticut Mutual  of  Hartford.  These  two  companies,  the 
Equitable  of  London  and  the  Connecticut  Mutual,  represent 
extreme  illustrations  of  what  one  ideal  of  life  insurance  can 
produce;  while  the  three  great  New  York  City  companies 
are  examples  of  what  another  ideal  has  thus  far  produced. 
The  Equitable  of  London  has  been  doing  business  for  one 
hundred  and  fifty  years  under  the  most  favorable  con- 
ditions and  in  the  very  center  of  opportunity.  The  qual- 
ity of  what  it  has  done  is  beyond  discussion,— it  is  good. 
The  quantity  of  its  achievements  is  so  pitiful  alongside 
of  what  its  opportunity  and  duty  demanded  that  people 
who  cite  it  as  a  life  insurance  model  can  hardly  under- 
stand the  logic  of  their  own  reference.  If  what  this  com- 
pany has  done  and  is,  make  it  a  model  of  what  a  life 
insurance  company  ought  to  do  and  to  be,  then  we  ought 
to  stop  using  electricity  and  steam,  we  ought  to  substitute 


The  Driving  Power  of  Life  Insurance  83 

the  stage-coach  for  the  limited  train,  we  ought  to  abandon 
the  ocean  greyhound  and  return  to  the  sailing  vessel. 

The  other  company  offers  an  equally  striking  illustration. 
When  Mr.  Jacob  L.  Greene  became  president  of  the  Con- 
necticut Mutual,  in  1869,  it  was  the  largest  and  most 
prosperous  life  insurance  company  in  the  United  States. 
When  he  died  recently,  the  company  was  smaller  than 
when  he  took  it  and  doing  less  than  half  the  business 
annually  that  it  did  forty  years  earlier.  There  can  be  no 
discussion  as  to  the  opportunity  which  this  company  en- 
joyed from  1869  to  1905.  We  all  know  the  history  of  our 
country,  and  know  what  has  been  done  within  that  period. 
We  are  all  proud  of  it.  We  know,  in  a  general  way,  what 
it  means  to  the  world  as  well  as  to  us.  We  know,  too,  that 
in  working  out  this  development  many  mistakes  have  been 
made.  It  was  a  hard  tussle,  a  constant  fight.  But  who, 
now  that  the  lapse  of  time  gives  us  a  better  comprehen- 
sion of  what  was  done,  thinks  much  about  the  mistakes, 
except  as  they  teach  lessons  for  the  future?  Who  doesn't 
rejoice  that  there  was  a  struggle?  Who  isn't  proud  if 
it  so  happened  that  he  or  his  forebears  had  a  hand  in  the 
struggle  ? 

It  is  difficult  to  find  a  man  who  will  say  that  the  rail- 
road development  of  the  country  within  forty  years  has 
not  been  worth  while;  there  have  been  times  when  such 
men  could  be  found  a-plenty.  It  would  be  more  difficult  to 
find  a  man  who  will  say  that  the  development  of  the  West 
during  that  time  has  not  been  worth  while.  It  would  be 
almost  impossible  to  find  a  man  who  visited  the  St.  Louis 
Exposition,  faced  the  great  peristyle  of  the  States,  and 
was  not  overwhelmed  with  the  majesty  and  utility  of  a 
movement  which,  in  spite  of  dangers,  in  spite  of  fears,  in 
spite  of  mistakes,  created  those  great  commonwealths. 
Yet,  we  can  find  numbers  of  men  to-day  who  look  at  the 
achievements  of  recent  years  in  life  insurance  and  have 


84  Militant  Life  Insurance 

very  grave  doubts  as  to  whether  it  was  worth  while. 
They  are  rather  disposed  to  applaud  and  praise  the  trifler 
— the  man  who  walked  through  this  field  of  opportunity 
and  did  nothing;  the  men  who  had  placed  in  their  hands 
the  power  to  accomplish  real  things  and  threw  it  away. 
There  is  a  disposition  to  applaud  the  record,  or  rather  the 
lack  of  record,  of  a  company  like  the  old  Equitable  of 
London,  and  to  commend  the  management  of  the  Con- 
necticut Mutual,  both  of  which  ran  away  from  their  duty 
and  frittered  away  a  glorious  opportunity. 

The  great  life  companies  have  had  to  face  all  the 
dangers  that  have  surrounded  corporate  development  in 
recent  years.  The  companies  have  had  to  deal  with  men, 
they  have  had  to  deal  with  legislators,  they  have  had  to 
deal  with  various  laws  variously  administered  by  forty- 
five  States,  and  as  many  other  countries  lying  beyond  our 
borders.  They  have  made  mistakes.  They  will  make 
other  mistakes.  It  is  easy  to  exaggerate  the  mistakes;  it 
is  easy  to  refuse  to  see  anything  but  these  mistakes.  It 
may  take  some  time  for  the  great  public,  which  is  now 
harried  and  alarmed,  to  comprehend  that  these  stupendous 
achievements  are,  after  all,  thoroughly  sound,  and  full 
of  promise  for  the  future. 

In  spite  of  errors,  in  spite  of  mistakes,  in  spite  of  some 
maladministration,  the  work  of  the  great  companies 
stands  high  among  the  things  nobly  done  during  this 
generation. 

They  have  worked  out  the  -first  great  problem  in  co- 
operation. They  have  met  a  world- wide  opportunity  and 
need  with  adequate  plans  backed  by  enormous  energy. 
They  have  rendered  a  service  which  in  practical  benefi- 
cence and  usefulness,  both  to  the  individual  and  to  the 
State,  has  not  been  surpassed. 


REMARKS 
BEFORE  THE  BOARD  OF  TRUSTEES 

ON    THE    OCCASION    OF    HI8    ELECTION    TO    THE    PBEBIDENOT   OF    THE    NEW-YORK   LIFE 

INSURANCE  COMPANY.    JUNE  17,  1907 


U  have  to-day  accepted  responsibility 
for  an  extraordinary  trust.  The  pub- 
licity which  attended  your  election,  the 
wide-spread  interest  in  it,  the  fact  that 
over  four  hundred  thousand  policy- 
holders  recorded  their  choice,  all  empha- 
size the  truth  that  life  insurance,  as 
practiced  by  this  Company,  is  more  than 
a  private  business,  that  life  insurance 
trustees  are  public  servants, — charged  at  once  with  the 
obligations  of  public  service  and  with  the  responsibilities 
that  attach  to  a  going  business  which  at  the  same  time 
must  be  administered  as  a  trust. 

By  an  overwhelming  vote  you  have  been  put  in  charge 
of  the  administration  of  a  great  business  and  a  great 
trust.  The  business  covers  the  civilized  world  in  its  rami- 
fications, and  involves  the  well-being  of  something  like 
5,000,000  people.  The  assets  which  attach  to  the  business 
and  have  been  committed  to  your  care  amount  in  round 

85 


86  Militant  Life  Insurance 

numbers  to  five  hundred  million  dollars.  The  people  who 
have  laid  this  most  honorable  commission  on  you  repre- 
sent substantially  all  races  and  countries  and  nationalities. 

I  know  that  you  are  keenly  appreciative  of  both  the 
quality  and  extent  of  your  obligations.  I  understand 
your  anxiety  in  selecting  the  men  who  are  day  by  day  to 
carry  this  burden  for  you,  who  are  to  discharge  this  trust 
on  your  behalf,  who  are  to  administer  for  the  benefit  of 
the  people  involved  the  multitudinous  and  exacting  de- 
tails to  which  it  is  impossible  for  you  to  give  personal 
attention. 

Your  first  official  act  has  been  to  choose  me  as  the  head 
of  the  Company.  I  hesitate  to  offer  you  the  usual  formula 
of  thanks,  because  any  such  expressions  necessarily  must 
fail  to  convey  my  appreciation  of  the  confidence  which 
your  choice  expresses.  My  long  connection  with  the 
New- York  Life — covering  nearly  twenty  years — my  ser- 
vice in  about  every  branch  of  the  Company's  working 
organization,  gives  me,  as  I  believe,  a  profound  apprecia- 
tion, not  merely  of  the  heavy  burden  that  you  have  placed 
on  my  shoulders,  but  of  the  standards  of  efficiency,  the 
standards  of  faith,  the  standards  of  integrity,  which  must 
be  maintained  at  all  times  by  the  man  who  serves  you 
and  the  policy-holders  in  this  high  office. 

My  thanks,  therefore,  for  an  honor  which  outranks  any 
distinction  within  the  reach  of  my  ambition,  cannot  be 
expressed  in  words;  they  must  be  read  out  of  the  record 
I  make  day  by  day. 

The  duties  before  us  are  primarily  extremely  practical 
in  their  character.  If  they  are  well  done,  they  must  be 
taken  up  vigorously.  The  law  must  be  observed  in  spirit 
as  well  as  in  letter,  and  that  keen  sense  of  justice  and 
love  of  fair  play,  which  in  the  end  always  marks  the  judg- 
ments of  the  American  people,  may  be  trusted  to  remedy 
excesses  and  correct  evils  in  the  laws  themselves,  just  as 


Remarks  on  Being  Chosen  President  87 

it  can  be  trusted  to  remedy  excesses  and  correct  evils  by 
process  of  law. 

Life  insurance  has  reached  the  end  of  one  period  of 
marvelous  development.  This  Company's  phenomenal 
growth  was  coincident  with  the  prodigious  development 
of  all  corporate  life,  but  its  growth  was  real  growth;  it 
was  not  the  result  of  combination  or  amalgamation.  Its 
advance  from  outstanding  insurance  of  about  five  hundred 
millions  to  outstanding  insurance  of  two  thousand  mil- 
lions in  less  than  fifteen  years,  was,  as  I  estimate  it,  a 
clear  addition  to  the  conservative  forces  of  society,  a 
creation  so  sound  that  under  your  wise  guidance  it  will 
speedily  justify  itself,  if  indeed  any  justification  is  or  ever 
was  necessary. 

The  purpose  of  the  builders  of  the  New-York  Life  was 
not  to  surpass  someone  else  in  achievement ;  nor  was  it  to 
gain  the  satisfaction  that  comes  to  properly  constituted 
men  when  great  work  has  been  well  done;  nor  did  they 
follow  an  altruistic  impulse.  These  motives  were  all 
present ;  but  the  belief  of  the  Company 's  creators  was  that 
there  was  economy  and  strength  and  certainty  in  a  world- 
wide institution,  and  that  as  against  the  buffeting  of  tune 
and  circumstance,  size  would  bring  an  ultimate  advantage. 
To  attain  that  strength  and  certainty  and  advantage  was 
the  moving  purpose  of  our  predecessors. 

The  laws  of  this  State  have  in  effect  declared  that  the 
activities  of  this  and  other  companies  must  diminish. 
Under  existing  statutes  it  will  not  be  possible  to  add  ma- 
terially to  the  number  of  people  now  insured  under  our 
contracts.  Whether  that  as  a  theory  of  statesmanship  is 
sound  or  unsound  is  a  question  which  time  will  settle. 
The  State  has  so  decreed  and  we  accept  the  decree  in  good 
faith.  But,  I  believe  that  such  restrictive  legislation 
applied  to  life  insurance  is  economically  unsound,  that 
this  Company  can  show  definitely  and  conclusively  that 


88  Militant  Life  Insurance 

it  has  peculiar  strength  and  permanency  because  of  its 
size,  and  that  it  is  now  exercising  the  economies  which 
naturally  go  with  a  large  and  established  plant. 

You  come  into  control  to-day  of  a  group  of  assets  re- 
markable for  its  quality  as  well  as  its  size.  In  the  schedule 
there  are  bonds  whose  par  value  amounts  to  $354,000,000, 
and  such  is  the  character  of  these  bonds  that  not  a  dollar 
of  interest  is  in  default;  there  are  real  estate  mortgages 
amounting  to  more  than  $44,000,000,  on  which  there 
is  no  interest  in  default;  there  is  real  estate  actually 
owned  amounting  to  over  $12,000,000,  represented  chiefly 
by  the  Company's  office  buildings  located  in  the  chief 
cities  of  the  world,  and  earning  net  on  book  value  a  higher 
rate  of  interest  than  any  other  single  group  of  assets, 
except  loans  to  policy-holders  on  the  security  of  their 
insurance  contracts.  You  take  over  these  assets  with  sub- 
stantially no  litigation  and  few  of  the  problems  which 
inevitably  arise  from  time  to  time  in  the  investment  and 
reinvestment  of  money.  These  facts  are  a  tribute  to  the 
fidelity  of  your  predecessors,  and  to  the  capacity  of  the 
men  who  have  been  in  charge,  so  strong  that  they  need 
only  be  stated  to  secure  the  approval  of  the  policy-holders 
and  of  thinking  men. 

As  you  probably  know,  when  the  State  about  a  year 
ago  adopted  material  modifications  in  the  laws  which  con- 
trol the  investment  of  funds  of  life  insurance  companies, 
the  new  laws  had  no  effect  whatever  on  our  investments. 
The  standards  of  our  Finance  Committee  had  long  been 
severer  than  the  laws  of  the  State  and  the  lawmakers  sub- 
stantially adopted  our  By-Law  with  regard  to  investments 
when  it  rewrote  the  investment  law  in  1906.  With  such 
a  record,  it  is  reasonable  to  assume  that  the  Finance 
Committee  will  make  no  material  change  in  its  progress. 
Within  a  year  and  a  half,  however,  a  relatively  larger 
portion  of  the  Company's  assets  has  been  invested  in 


Remarks  on  Being  Chosen  President  89 

first  liens  on  real  estate.  This  line  of  investment,  with 
due  regard  to  good  opportunities  to  buy  bonds,  will  con- 
tinue to  have  my  support  as  a  member  ex-officio  of  the 
Finance  Committee. 

Amongst  the  problems  that  face  this  Board  in  its  con- 
duct of  the  Company's  affairs,  I  see  nothing  more  men- 
acing just  now  than  the  tendency  to  pass  unreasonable 
legislation  with  regard  to  life  insurance  in  the  various 
States  of  the  Union.  These  bills  largely  relate  to  taxation 
and  involve  a  constantly  increasing  drain  upon  the  pre- 
miums paid  by  the  policy-holders.  Most  of  the  States 
charge  what  may  properly  be  called  an  income  tax.  This 
tax  varies  in  different  States.  The  tax  has  always  been 
considered  in  the  nature  of  a  franchise  tax,  one  of  the 
conditions  on  which  the  Company  is  permitted  to  solicit 
life  insurance.  The  result  is  not  only  a  very  heavy  and 
unjust  burden  upon  the  thrifty,  but  as  the  tax  varies  in 
different  States,  the  injustice  is  not  evenly  distributed. 

Another  kind  of  legislation  which  is  even  more  drastic 
in  its  purpose  is  that  which  would  force  the  Finance  Com- 
mittee to  purchase  certain  specified  securities  and  then 
deposit  these  securities  with  some  designated  official  of 
the  State.  Back  of  this  is  the  purpose  to  tax  this  property 
locally  when  it  is  so  deposited.  While  this  type  of  legis- 
lation has  threatened  the  companies  for  many  years,  it 
has  never  taken  serious  form  in  any  State  of  the  Union 
until  this  year.  We  are  now  confronted  with  laws  in 
Texas  so  objectionable  that  at  the  stated  meeting  of  this 
Board  in  the  month  of  May,  authority  was  given  to  the 
Officers  of  the  Company  in  their  discretion  not  to  ask  for 
a  renewal  of  our  Texas  license  in  1908,  and  to  cease  doing 
new  business  there  whenever  in  their  judgment  the  situa- 
tion demands  it.  I  believe  the  action  taken  by  the  Board 
is  absolutely  sound  and  entirely  warranted. 

Finally,  it  is  worth  while  to  notice  that  life  insurance 


90  Militant  Life  Insurance 

as  an  institution  and  as  represented  by  individual  com- 
panies has  passed  through  a  period  of  such  trial  and  stress 
as  rarely  comes  to  any  business  enterprise,  and  that  even 
in  the  very  heat  and  fury  of  public  misunderstanding 
and  indignation,  no  person  whose  opinion  was  worth  con- 
sidering even  suggested  that  this  Company  was  anything 
but  abundantly  solvent  and  abundantly  able  to  carry  out 
all  its  pledges.  It  is  certainly  fair  to  say  that  this  is 
not  the  result  of  an  accident,  because  this  condition  is 
not  found  to  exist  in  other  lines  of  business  when  put  to 
corresponding  tests.  Neither  is  it  fair  to  say  that  it 
inheres  in  the  nature  of  the  business  itself. 

There  is  no  resisting  the  conclusion  that  life  insurance, 
upon  the  whole,  has  been  soundly  and  wisely  managed. 
This  will  inevitably  be  the  conclusion  of  the  general  pub- 
lic, and  with  that  conclusion  will  come  a  clearer  recog- 
nition not  merely  of  the  strength  but  of  the  usefulness 
of  life  insurance.  Considering  the  size  of  our  membership 
and  the  extent  of  it,  the  public  has  a  right  to  demand 
that  this  Company  shall  be  one  of  the  most  useful  insti- 
tutions,—perhaps  the  most  useful  institution,— of  its 
kind  in  the  world.  To  satisfy  such  public  expecta- 
tion is  an  ambition  of  the  first  order,  and  I  appreciate 
that  nothing  less  than  the  achievement  of  that  ambition 
will  satisfy  you. 


LETTER  TO  POLICY-HOLDERS 


PRESIDENT'S    OFFICE 

NEW-YORK   LIFE   INSURANCE   COMPANY, 
346  &  348  BROADWAY,  NEW  YORK. 


July  12,  1907. 
To  THE  POLICY-HOLDERS  OF  THE 

NEW- YORK  LIFE  INSURANCE  COMPANY. 

,N  assuming  the  responsibility  of  Chief 
Executive  Officer  of  the  New- York  Life, 
I  have  been  greatly  encouraged  by 
many  assurances  of  good  will  and  con- 
fidence, not  alone  from  the  working  force 
of  the  Company,  but  from  the  policy- 
holders  and  the  press.  For  all  these 
expressions  I  am  sincerely  grateful. 

Life  insurance  undoubtedly  is  en- 
tering upon  a  new  phase  of  its  development.  For  fifteen 
years  the  New- York  Life  has  been  so  related  to  the  growth 
of  life  insurance  that  of  necessity  it  must  sustain  im- 
portant relations  to  the  developments  of  the  new  period 
on  which  we  are  entering.  The  fifteen  years  just  passed 
have  been  years  of  expansion,  development  and  solid 
growth.  This  has  been  true  of  all  progressive  life  com- 
panies, and  it  has  been  strikingly  true  of  this  Company. 


91 


92  Militant  Life  Insurance 

The  New- York  Life,  beyond  any  other  similar  institution, 
carried  the  benefits  of  life  insurance  to  all  the  world.  It 
erected  as  a  necessary  part  of  its  development  a  great 
financial  plant,  the  solidity  of  which  is  attested  by  the  fact 
that  at  the  date  of  my  election  as  President  there  was  no 
interest  in  default  on  its  bonds  amounting  to  $354,000,000 
par  value,  and  no  interest  in  default  on  its  mortgage  loans 
aggregating  nearly  $45,000,000.  In  the  location  of  its 
business,  in  the  sources  of  its  income  and  in  the  dissemi- 
nation of  its  obligations,  the  Company  is  distinctly  inter- 
national. That  our  development  was  wise  has  been  dis- 
puted, and  the  State  of  New  York  has  enacted  laws  which 
have  stopped  that  expansion,  and  may  result  in  a  period 
of  reaction.  We,  on  the  other  hand,  hold  that  whether 
the  Company  is  larger  or  smaller,  whether  it  is  national 
or  international  in  its  interests  and  activities,  is  material 
if  it  can  be  shown  that  the  one  condition  or  the  other 
favorably  affects  the  interests  of  its  members.  If  the  Com- 
pany can  better  serve  its  members  by  a  still  further 
expansion  in  its  business,  then  it  ought  to  be  allowed  to 
expand.  If  experience  proves  that  we  can  better  serve 
the  interests  of  the  policy-holders  by  a  decrease  in  our 
outstanding  risks  and  a  lessening  of  our  activities,  then 
that  ought  to  be  the  fixed  policy  of  its  officers.  All  expe- 
rience thus  far,  however,  shows  that  the  useful  life  insur- 
ance company  is  progressive.  Progress  may  take  on  a 
variety  of  forms,  and  all  in  their  way  may  be  good.  I 
profoundly  believe  that  life  insurance  management  should 
take  its  cue  from  the  idea  of  life  insurance  itself.  A  man 
cannot  insure  himself ;  the  vicissitudes  of  life  compel  him 
to  join  his  resources  and  the  value  of  his  life  with  other 
lives  in  order  to  secure  for  his  dependents  some  degree 
of  certainty,  in  order  that  the  shock  and  loss  produced 
by  death  may  be  mitigated.  How  far  should  he  go  in 
seeking  other  lives  with  which  to  make  this  defensive  al- 


Letter  to  Policy-holders  93 

liance?  Experience  teaches  him  that  business,  and  even 
communities,  face  at  times  the  same  conditions  that  men- 
ace the  individual.  Property  values  go  up  and  down  over 
considerable  areas  for  considerable  periods  of  time.  That 
life  insurance  structure  is  certainly  well  planned  and 
probably  well  built,  which  rests  on  risks  widely  placed 
and  securities  so  varied  in  their  character  that  they  will 
necessarily  be  less  affected  by  considerable  fluctuations 
locally  in  property  values. 

In  putting  an  arbitrary  limitation  upon  the  amount 
of  business  which  this  Company  may  do  in  any  year,  I 
believe  the  State  of  New  York  has  made  an  economic 
mistake.  I  believe  all  such  legislation  to  be  fundamen- 
tally unsound.  We  ought  in  the  interests  of  the  policy- 
holders,  and  in  order  to  carry  out  what  seems  to  me  to  be 
the  broadest  and  the  safest  and  the  soundest  theory  of  man- 
agement, to  be  permitted  to  do  what  business  we  can 
normally  within  the  limit  of  expenses  fixed  by  law.  The 
great  plant  which  now  exists,  erected  soundly  and  at  con- 
siderable cost,  ought  to  be  fully  utilized  in  order  to  return 
full  value  to  our  insured. 

The  men  who  planned  the  Company  believed  that 
there  was  not  only  unequaled  strength  and  permanency 
in  a  world-wide  institution,  but  that  there  was  economy. 
I  believe  they  were  correct  in  their  assumptions.  If,  how- 
ever, we  learn  from  larger  experience  that  they  were 
wrong,  and  that  a  life  insurance  company  can  better  serve 
its  members  if  it  has  only  one  thousand  millions  of  insur- 
ance instead  of  two  thousand  millions,  if  it  operates  in 
only  one  country  instead  of  all  the  countries  of  the  world, 
then  I  shall  be  quick  to  recognize  that  fact  and  shall  act 
accordingly. 

In  undertaking  this  great  work,  I  desire  to  call  the 
policy-holders'  attention  to  three  existing  conditions,  and 
to  discuss  our  relations  to  those  conditions. 


94  Militant  Life  Insurance 

First. — Hostility  has  lately  sprung  up  in  the  minds  of 
many  people  against  corporations,  especially  against  cor- 
porations of  great  size.  I  cannot  here  discuss  the  reasons 
for  this.  It  is  sufficient  for  my  purpose  to  say  that  cor- 
porations of  great  size  must  justify  themselves.  They 
must  show  affirmatively  that  they  are  an  advantage  to 
the  people  and  not  a  disadvantage ;  that  they  are  for  the 
benefit  of  society,  and,  therefore,  to  be  fostered  and  pro- 
tected. The  policy-holders  in  this  Company,  for  example, 
should  regard  it  not  as  a  corporation  merely, — something 
outside  themselves,  unapproachable  and  possibly  more  or 
less  unfriendly.  They  should  regard  it  as  their  property, 
because,  with  due  regard  to  the  rights  of  all  the  other 
members  associated  with  them,  the  New-York  Life  Insur- 
ance Company  is  their  property.  So  far  as  in  me  lies,  the 
affairs  of  the  Company  will  be  so  conducted  that  fair- 
minded  policy-holders  will  believe  in  it,  and  will  turn  to 
the  officers  for  information  when  information  is  desired. 
Few  accomplishments  are  possible  by  mere  administra- 
tion which  will  be  of  more  permanent  value  to  the  insured. 
The  Second  condition  to  which  I  refer  is  this : 
The  New-York  Life  is  a  purely  mutual  institution. 
All  of  its  members,  under  regulations  and  conditions  pre- 
scribed by  law,  have  a  right  to  vote  for  Directors.*  As  a 
natural  part  of  the  development  of  the  Company,  and  to 
comply  with  the  law  regulating  its  solvency,  we  have  ac- 
cumulated upwards  of  five  hundred  millions  cash  assets. 
The  institution  takes  on  the  dimensions  and  the  importance 
of  a  free  State  governed  by  its  constituent  members 
through  the  right  of  franchise.  As  the  Company  increases 
in  importance,  as  its  assets  roll  up,  the  necessity  for  the 
policy-holder  to  be  level-headed  and  to  have  an  intelligent 
comprehension  of  the  affairs  of  the  Company  equally  in- 


*See  memorandum  attached  hereto. 


Letter  to  Policy-holders  95 

creases.  The  strength  of  the  institution,  indeed  the  very 
things  that  make  its  contracts  desirable,  put  a  responsi- 
bility upon  the  policy-holders  second  only  to  that  which 
rests  upon  the  Directors  and  Officers. 

The  Third  condition  is:  The  constantly  increasing 
burden  put  upon  policy-holders  by  legislation  which 
usually  takes  the  form  of  taxation.  In  1906  these  taxes 
(excluding  taxes  on  real  estate)  amounted  to  almost 
$1,000,000.  This  is  a  constantly  increasing  expenditure. 
If  any  tax  which  takes  away  a  portion  of  the  premiums 
paid  can  be  held  to  be  a  proper  tax,  payments  on  this 
account  have  now  reached  an  unreasonable  sum,  and  have 
become  not  only  a  source  of  great  injustice  to  the  thrifty 
but  a  positive  menace  to  administration.  The  remedy  lies 
largely  with  the  policy-holders.  In  almost  every  line  of 
business  hostile  legislation  is  at  once  met  by  vigorous 
protests  from  those  whom  it  most  directly  affects.  A  pro- 
posal to  tax  life  insurance  premiums  is  a  proposal  to  in- 
crease the  cost  of  life  insurance  to  the  consumer.  Such 
taxes  are  levied  because  the  policy-holders  are  not  likely 
to  protest.  It  is  time  the  policy-holders  did  protest.  It 
is  time,  for  example,  that  the  policy-holders  in  this  Com- 
pany realized  that  the  taxes  of  this  character  paid  in  1906 
would  otherwise  have  been  included  in  the  dividends  of 
the  year  or  credited  to  dividend  account.  Mutual  life 
insurance  is  not  conducted  for  profit,  and  its  premiums 
are  not  a  proper  subject  for  taxation  of  this  sort.  The 
administration  will  need  as  never  before  the  co-operation 
of  all  policy-holders  as  against  the  increasing  tendency 
to  levy  taxes  of  this  kind.  I  ask  all  the  policy-holders, 
therefore,  to  bear  this  in  mind,  and,  especially  in  matters 
of  legislation,  to  aid  the  management,  in  order  to  secure 
from  Legislatures  the  " square  deal"  to  which  every  man 
is  entitled. 

So  far  as  a  definite  program  can  be  laid  down  in  con- 


96  Militant  Life  Insurance 

nection  with  questions  which  do  not  take  form  until  they 
arise,  and  which  take  on  an  almost  endless  variety  from 
year  to  year,  my  plan  involves  these  points : 

First:     Strict  economy. 

Second:    The  widest,  fairest  and  fullest  publicity. 

Third:  An  administration  which  will  aim  to  continue 
the  New- York  Life  as  a  world-wide  institution,  utilizing 
the  strength  which  it  has  already  drawn  from  that  con- 
dition, and  endeavoring  to  hand  on  the  same  benefits  to 
future  generations. 

Fourth:  Such  an  amount  of  new  business  under  the 
law  as  we  can  secure  while  practicing  intelligent  economy, 
and  enforcing  the  idea  that  the  interest  of  the  policy-holder 
is  paramount. 

The  New- York  Life  has  had  a  marvelous  history  during 
its  sixty-two  years  of  corporate  existence.  Based  upon  a 
principle  and  a  charter,  it  has  grown  to  be  the  largest  life 
company  in  the  world  in  respect  of  annual  income,  annual 
benefits  to  policy-holders,  annual  new  business,  and  amount 
of  insurance  protection  furnished.  It  was  never  better  pre- 
pared to  serve  its  policy-holders  than  it  is  to-day.  The 
possibilities  of  its  future  usefulness  present  a  picture  which 
may  well  stir  the  ambition  of  any  man.  I  undertake  this 
great  commission  untrammeled  by  any  obligation  to  any 
outside  interest.  With  your  sympathy  and  support  I  hope 
to  advance  the  usefulness  of  what  has  been  called  "The 
First  Business  of  the  World ",  and  to  make  the  New- York 
Life  all  that  its  creators  planned  it  to  be— all  that  its  high 
professions  and  possibilities  demand  it  should  be. 

MEMORANDUM. 

At  the  recent  election  of  the  Trustees  of  the  New- York 
Life  Insurance  Company  there  were  two  tickets  voted 
for— the  ticket  named  by  the  Board  of  Trustees  of  the 


Letter  to  Policy-holders  97 

Company,  designated  by  law  the  "Administration  Ticket", 
and  the  "International  Committee  Ticket",  so  designated 
by  the  Superintendent  of  Insurance.  The  ballots,  whether 
by  mail  or  by  proxy  or  delivered  in  person,  were,  on  the 
18th  of  December,  1906,  turned  over  to  inspectors  appointed 
by  the  Superintendent  of  Insurance  of  the  State  of  New 
York.  These  inspectors  duly  canvassed  the  vote  which 
they  received,  and  certified  the  results  to  the  Company 
on  June  15,  1907.  Their  certificate  shows  over  400,000 
ballots  cast,  of  which  a  very  large  number  were  defective. 
The  average  vote  for  each  ticket  was  as  follows : 

For  the  Administration  Ticket. 236,000 

For  the  Opposition  Ticket 98,000 

During  the  progress  of  the  campaign  two  men  on  the 
Administration  Ticket,  Hon.  James  H.  Eckels,  of  Chicago, 
and  Mr.  Ewald  Fleitmann,  of  New  York,  died.  Upon 
the  organization  of  the  new  Board,  Mr.  Geo.  F.  Seward, 
of  New  York,  resigned.  This  left  three  vacancies  in  the 
Board,  which  were  duly  filled  on  July  10  by  the  election 
of  Hon.  A.  B.  Hepburn,  of  New  York,  Mr.  L.  F.  Dommerich, 
of  New  York,  and  Mr.  Granger  A.  Hollister,  of  Rochester, 
New  York. 

Following  is  the  Board  of  Directors  of  the  Company : 

JOHN  E.  ANDRUS Yonkers,  N.  Y. 

Manufacturing  Chemist. 

JOHN  CLAFLIN Morristown,  N.  J. 

President  H.  B.  Claflin  Co.,  Dry  Goods,  New  York  City. 

LOUIS  F.  DOMMERICH New  York  City. 

L.  F.  Dommerich  &  Co.,  Dry  Goods. 

JULIUS  FLEISCHMANN Cincinnati,  O. 

The  Fleischmann  Co. 


98  Militant  Life  Insurance 

THOMAS  P.  FOWLER New  York  City. 

President  New  York,  Ontario  &  Western  R.  R. 

DAVID  R.  FRANCIS St.  Louis,  Mo. 

Ex-Governor  of  Missouri;  Grain  Merchant. 

A.  BARTON  HEPBURN New  York  City. 

President  Chase  National  Bank. 

GRANGER  A.  HOLLISTER Rochester,  N.  Y. 

Vice-President  National  Bank  of  Rochester. 

DARWIN  P.  KINGSLEY Riverdale-on-Hudson,  N.  Y. 

President. 

WOODBURY  LANGDON New  York  City. 

Joy,  Langdon  &  Co.,  Dry  Goods. 

ROBERT  J.  LOWRY Atlanta,  Ga. 

President  Lowry  National  Bank. 

/ 

CLARENCE  H.  MACKAY Roslyn,  Long  Island. 

President  Commercial  Cable  Co. 

JOHN  G.  MILBURN New  York  City. 

Carter,  Ledyard  &  Milburn,  Lawyers. 

SETH  M.  MILLIKEN New  York  City. 

Deering,  Milliken  &  Co.,  Dry  Goods. 

GEO.  AUSTIN  MORRISON New  York  City. 

President  American  Cotton  Oil  Co. 

HENRY  C.  MORTIMER New  York  City. 

Mortimer  &  Wisner,  Chemicals. 

ALEXANDER  E.  ORR Brooklyn,  N.  Y. 

Ex-President  Chamber  of  Commerce, 
New  York  City. 

AUGUSTUS  G.  PAINE New  York  City. 

President  New  York  &  Pennsylvania  Co. 

WM.  B.  PLUNKETT Adams,  Mass. 

Treasurer  Berkshire  Cotton  Mills. 

ANTON  A.  RAVEN Brooklyn,  N.  Y. 

Pres.  Atlantic  Mutual  Marine  Ins.  Co., 
New  York  City. 


Letter  to  Policy-holders  99 

JOHN  REID Yonkers,  N.  Y. 

Treas.  and  Gen'l  Manager  J.  L.  Mott  Iron  Works, 
New  York  City. 

FLEMING  H.  REVELL New  York  City. 

The  F.  H.  Revell  Co.,  Publishers,  New  York,  Chicago, 
Edinburgh. 

ELBRIDGE  G.  SNOW New  York  City. 

President  Home  Fire  Insurance  Co.,  N.  Y. 

HIRAM  R.  STEELE Brooklyn,  N.  Y. 

Steele,  DeFreese  &  Frothingham,  Lawyers, 
New  York  and  London. 

LOUIS  WAGNER Philadelphia,  Pa. 

President  Third  National  Bank. 


SOME  LESSONS  FOR  POLICY-HOLDERS 


REMARKS  BEFOBE  POLICY-HOLDERS  AND  AGENTS  IN  CHIOAGO,  AUGUST  «,  1907 


R  people  interested  in  life  insurance, 
whether  as  policy-holders  or  as  life  insur- 
ance men,  the  events  of  the  past  two  years 
have  many  lessons.  The  first  hasty  judg- 
ment might  be  that  the  lessons  belong 
entirely  to  life  insurance  men.  This 
would  be  a  mistaken  conclusion.  The  life 
insurance  man  has  learned  his  lesson. 
There  is  no  doubt  about  that.  All  Trus- 
tees have  learned  what  some  have  always  known,  namely, 
that  they  are  public  servants,  that  while  they  may  not  be 
able  to  follow  the  detail  of  the  business  of  a  great  Life 
Insurance  Company  they  must  have  thorough  general 
knowledge  of  the  plans  and  methods  of  the  Company's 
officers,  and  especially  must  insist  that  the  administration 
of  the  Company  be  consistent  with  a  high  sense  of  Trustee- 
ship. 

The  question  which  I  want  to  consider  chiefly  to-day, 
however,  is,  With  all  that  he  has  suffered  and  all  that  he 
has  lost  what  has  the  policy-holder  learned,  what  has  he 
gained  from  the  events  of  the  last  two  years?  There  is 


100 


Some  Lessons  for  Policy-holders  101 

evidence  everywhere  of  reawakened  interest,  but  we  have 
not  yet  moved  far  enough  away  from  the  turmoil  and 
stress  of  what  is  known  as  the  "Life  Insurance  Investiga- 
tion", to  get  an  entirely  accurate  picture  of  the  mind  of 
the  average  policy-holder.  One  of  the  problems  facing 
life  insurance  management  to-day  is  how  to  correct  the 
misconceptions,  the  misunderstandings  and  the  wrong 
conclusion  which  followed  that  investigation.  If  we 
knew  that  in  the  public  mind  there  rested  only  the  actual 
facts  that  were  developed,— bad  as  some  of  them  were,— 
the  problem  would  be  relatively  easy.  But  the  facts  were 
never  fairly  put  before  the  public,  not  even  the  facts  of 
which  life  insurance  men  were  ashamed.  The  mistakes 
and  the  sins  of  some  life  insurance  men  were  distorted, 
misstated,  and  in  that  form  telegraphed  all  over  the  world 
and  found  lodgment  in  the  minds  and  hearts  of  men. 
What  life  insurance  management  faces  to-day  then  is  not 
a  correction  of  faults,  and  the  wickedness  in  spots,  with 
which  it  was  properly  enough  chargeable,  but  monstrous 
things,  untruths,  and  what  sometimes  seem  to  have  been 
wilful  misstatements.  Yet  there  is  reason  to  believe  that 
the  policy-holder  has,  upon  the  whole,  maintained  a  pretty 
good  grip  on  himself,  and  has  a  better  conception  of  the 
actual  condition  of  the  Companies  and  his  personal  in- 
terests than  would  be  possible  if  he  had  believed  all  that 
he  read.  With  each  passing  day  this  condition  becomes 
more  general.  The  Companies  go  on  in  their  usual  way; 
they  pay  their  death  claims  and  their  dividends;  they 
show  that  every  line  in  their  contracts  is  good  for  all  it 
calls  for,  and  the  common  sense  not  only  of  the  policy- 
holders  but  of  the  general  public  begins  to  recognize  that 
there  was  and  is  another  side  to  the  insurance  situation, — 
a  side  which  was  not  presented  in  the  investigation,  and 
which  perhaps  could  not  be,  a  side  which  was  really  the 
body  of  life  insurance.  As  recognition  of  this  fact 


102  Militant  Life  Insurance 

spreads,  there  will  necessarily  spring  up  with  better 
knowledge  a  firmer  grip  by  the  insured  on  himself,  on 
his  Company,  and  on  the  institution  of  life  insurance. 

Every  great  forward  movement  amongst  men  has  written 
a  story  which  is  not  unlike  the  chapter  recently  written 
in  the  history  of  our  business.  If  ours  had  been  a 
business  of  small  importance,  there  would  have  been  no 
investigation;  if  life  insurance  had  not  begun  to  assume 
national  importance,  it  would  not  have  been  put  through 
the  fiery  ordeal  from  which  it  is  just  emerging.  But  it  is 
a  national,  even  an  international  question;  it  does  come 
straight  from  the  homes  and  hearts  of  the  people ;  it  reaches 
into  every  corporate  interest ;  its  problems  are  found  before 
every  Legislature;  its  questions  are  before  every  Court;  its 
condition  and  management,  the  fidelity  of  its  Trustees  and 
the  integrity  of  its  Officers  are  questions  of  statesmanship. 
The  people  have  traveled  this  road  before,  while  solving 
similar  problems.  For  example,  it  is  not  so  many  years  ago 
that  men  had  very  hazy  and  uncertain  notions  about  their 
civil  rights.  There  was  a  theory  abroad  in  the  world,  but 
not  much  more.  The  only  people  who  had  any  real  rights 
were  the  feudal  chiefs  and  overlords,  and  the  more  the 
student  looks  into  the  facts  which  lie  back  of  the  seemingly 
slpendid  civilizations  of  a  few  centuries  ago,  the  more  he 
realizes  that  these  civilizations  rested  on  masses  of  peo- 
ple who  were  without  civil  rights  and  almost  without 
hope.  The  history  of  the  nations  is  largely  made  up 
of  struggles  for  civil  rights,  which  finally  bore  fruit 
in  the  Constitution  of  the  United  States.  The  ballot 
represents  the  birth  of  real  manhood.  With  all  its  oc- 
casional misuse,  with  all  the  corruption  that  sometimes 
surrounds  it,  the  ballot  is  and  always  must  be  an  expression 
of  sovereign  power ;  the  sovereignty  which  belongs  to  a  man 
because  he  is  a  man;  and  while  politicians  prate  about  it, 
and  make  phrases  about  it,  and  while  we  not  infrequently 


Some  Lessons  for  Policy-holders  103 

neglect  our  duty  with  relation  to  it,  still  we  are  perfectly 
conscious  that  we  have  in  it  a  remedy  for  "grafting",  for 
public  inefficiency,  and,  within  reasonable  limitations,  for 
all  the  evils  which  beset  civil  government.  We  can,  if  we 
will,  establish  justice  as  against  every  influence  which  may 
oppose. 

"But  how  have  these  reflections/'  you  ask,  "to  do 
with  life  insurance,  with  the  existing  questions  in  life  in- 
surance, with  the  problems  of  management,  with  the  wel- 
fare of  the  insured?" 

They  have  to  do  with  life  insurance  and  with  the 
insured  because  they  illustrate  how  a  great  idea,  now 
dominant  in  the  world,  was  worked  out;  because  life  in- 
surance is  a  similar  and  an  almost  equally  great  idea; 
because  the  life  insurance  idea  is  being  worked  out  to 
a  conclusion  which  is  almost  equally  important.  Life 
insurance  is  not  merely  a  question  of  business;  it  is  a 
part  of  the  sociology  of  the  times.  It  strikes  far  deeper 
than  premium  rates,  reserves,  investments,  and  mortality, 
as  such. 

We  say  of  the  tendencies  of  the  age  that  they  are 
socialistic,  and  so  they  are.  We  see  evidences  of  this 
in  our  literature,  in  our  politics,  in  our  legislation,  even 
in  the  decisions  of  the  Courts.  What  is  socialism?  I 
shall  not  attempt  to  give  you  a  definition,  but  life  insur- 
ance is  not  socialism,  and,  properly  speaking,  is  not  even 
socialistic.  It  is  co-operation,  but  co-operation  based  on 
the  doctrine  of  value  for  value.  The  struggle  of  the 
day,  whether  we  call  it  socialistic  or  something  else,  is  to 
establish  for  general  society  some  programme  by  which  a 
man,  if  he  is  a  man,  may  insure  for  his  family  and  for 
his  old  age  equality  and  certainty  and  comfort,  something 
for  his  estate  akin  to  what  the  ballot  gives  him  individually. 

If  maturity  gives  the  right  to  vote  and  puts  a  man 
irrespective  of  nearly  all  other  considerations  on  an 


104  Militant  Life  Insurance 

equality  with  all  other  men  in  the  government  of  his 
country,  how  may  the  value  of  a  sound  life  backed  by 
honest  purposes  be  utilized  as  a  hostage  to  fate  in  that 
other  struggle  which  begins  with  youth  and  ends  only 
with  death  or  old  age?  This  is  the  substance  of  the 
question  that  men  have  asked  more  or  less  consciously 
for  many  years  and  life  insurance  is  its  answer. 

The  recent  upheaval  in  life  insurance  is  teaching  the 
policy-holders  a  better  knowledge  of  the  true  significance 
of  this  contract  they  have  entered  into,  and  they  are  coming 
to  recognize  the  fact  that  a  life  insurance  contract  in  a 
sound  institution  is  as  much  a  matter  of  public  interest  as 
laws  which  promote  education  or  encourage  good  morals. . 

The  growth  of  life  insurance  was  a  natural  preface  to 
the  problems  which  face  us  to-day  in  business  and  in  poli- 
tics. It  was  a  solution  of  the  problem  which  developed 
as  the  problem  itself  developed.  Men  began  to  preach  it 
about  sixty  years  ago  seriously  and  earnestly.  The  idea 
has  been  in  the  world  for  a  long  time,  but  the  world  has 
only  lately  begun  to  understand  and  accept  it.  Having 
established  his  civil  rights  so  firmly  that  no  one  remained 
to  quarrel  with  him  over  the  subject,  having  no  one  to 
blame  but  himself  if  these  rights  were  not  properly  safe- 
guarded and  protected,  the  citizen  naturally  next  con- 
sidered his  material  condition  and  well-being,  the  question 
of  the  comfort  of  himself  and  of  his  family.  This  was  an 
almost  necessary  sequence.  The  ballot  protected  him  in 
his  property  rights,  but  he  needed  something  more.  With 
his  civil  rights  established  and  his  property  rights  assured, 
the  individual  still  found  himself  menaced  by  all  the  vicis- 
situdes and  accidents  of  life.  Between  his  family  and  pos- 
sible want  there  was  only  a  frail  defense.  He  found  that 
even  though  he  had  the  ballot,  he  could  no  more  stand  alone 
and  protect  his  family  and  his  old  age  than  he  could  form 
a  government  of  his  own  independently  of  his  fellow-beings. 


Some  Lessons  for  Policy-holders  105 

So  through  life  insurance  he  began  to  join  forces  with  his 
neighbors;  then  he  extended  his  connection  to  the  next 
County;  then  to  the  next  State;  then  to  all  the  States 
of  the  Union;  and  then  to  neighboring  countries.  Finally 
he  went  over  sea  and  joined  hands  with  men  of  similar 
occupation  and  similar  longevity  value  in  every  country, 
without  regard  to  any  other  question,  without  arguing  over 
race,  or  religion,  or  color. 

Under  the  leadership  of  certain  aggressive  and  powerful 
men,  the  work  spread  mightily,  until  in  a  vague  and  un- 
certain and  indefinite  sort  of  way  the  entire  world  began 
at  last  to  realize  that  here  was  a  new  idea,  a  new  factor 
in  human  life,  something  of  vast  importance,  something 
that  involves  great  power  and  grave  responsibilities.  Then 
the  world  began  to  ask  questions.  Professing  much,  the 
business  had  much  to  answer  for.  Advancing  high  stand- 
ards of  conduct,  it  was  inevitable  that  its  own  conduct 
should  be  mercilessly  criticised.  With  the  success  which 
came  when  a  large  part  of  the  world  began  to  recognize 
how  useful  and  necessary  life  insurance  is  came  its  first 
supreme  trial.  It  had  to  meet  the  test  that  has  always  been 
applied  to  great  movements  amongst  the  people.  It  was 
put  upon  the  rack;  it  was  twisted  and  torn;  it  was  merci- 
lessly questioned  and  cross-questioned.  It  was  caught  up 
at  the  close  of  a  period  of  enormous  activity  and  growth 
and  subjected  to  the  judgment  of  a  jury  to  which  was 
presented  all  the  errors  and  faults  of  administration,  all 
the  evil  practices  of  a  few  men;  but  the  virtues,  the  benefi- 
cence, the  strength,  the  essential  integrity  of  management 
were  not  presented.  The  jury  was  merciless,  which  was 
right;  because  to  be  consistent  with  its  high  profession, 
life  insurance,  within  reasonable  limitations,  must  be  ready 
at  any  time  to  go  upon  the  stand  and  answer  the  fair 
judgment  of  mankind.  If  we  admit,  as  we  must,  that  life 
insurance  suddenly  put  in  the  high  light  of  public  atten- 


106  Militant  Life  Insurance 

tion  was  bewildered  and  made  ashamed;  that  gross  errors 
were  uncovered;  that  indefensible  wickedness  in  spots  was 
revealed,— we  have  after  all  admitted  only  what  has  been 
true  at  times  of  every  human  enterprise,  what  has  been 
true  even  of  the  Church,  and  we  have  not,  therefore,  admit- 
ted any  verdict  against  the  institution  itself. 

But  we  have  begun  to  move  away  from  that  condition. 
The  fury  of  criticism  is  passing.  Facts  begin  to  assume 
their  natural  force  and  relation.  Out  of  the  mists  and  fog 
of  public  misstatement  and  misunderstanding,  the  propor- 
tions of  a  structure  which  is  imperial  in  its  extent  and 
superb  in  its  strength  and  beauty  begin  to  emerge. 

I  said  lately  to  the  policy-holders  that  the  New- York 
Life  takes  on  the  dimensions  and  importance  of  a  free  State 
governed  by  its  constituent  members  through  the  right  of 
franchise.  But  no  such  State  was  ever  erected  before.  ,  Its 
citizenship  encircles  the  world.  Its  registered  members 
total  something  like  eight  hundred  thousand  selected  lives 
and  directly  involve  the  welfare  of  5,000,000  people.  They 
have  been  induced  to  ignore  the  usual  prejudices  that  sepa- 
rate one  people  from  another,  and  have  sought  in  the  con- 
tracts of  the  Company  the  kind  of  certainty  for  themselves 
and  their  families  that  their  social  organization  fails  to 
give  them,  that  their  governments  cannot  offer.  They  have 
mutually  entered  into  pledges  with  each  other.  Those 
pledges  aggregate  in  our  Company  alone  two  billion  dol- 
lars. As  time  has  passed  pledges  have  matured  and  all 
have  been  made  good.  Since  the  organization  of  the 
Company,  its  pledges  have  been  redeemed  to  the  extent  of 
$560,000,000.  No  pledge  has  ever  been  repudiated;  no 
payment,  except  through  the  usual  accidents  of  business, 
has  ever  been  improperly  delayed.  There  is  in  hand  as 
a  necessary  guarantee  that  all  future  pledges  will  be 
redeemed  the  sum  of  $500,000,000.  The  policy-holders  never 
at  any  time  lost  sight  of  these  facts.  They  were  never  stam- 


Some  Lessons  for  Policy-holders  107 

peded,  even  in  the  midst  of  the  most  terrific  outcry.  They 
were  disturbed,  and  some  of  them  were  induced  to  sacrifice 
some  portion  of  their  savings  through  too  hasty  action. 

The  future  of  this  world- wide  institution,  and  to  a  large 
degree  the  future  of  life  insurance,  rests  in  our  hands. 
I  say  "our"  hands  because  a  large  degree  of  responsibility 
rests  upon  the  policy-holder;  the  entire  responsibility  can- 
not be  placed  upon  the  Trustees  and  Officers.  Will  you 
think  that  I  am  visionary  if  I  say  I  can  hardly  imagine  a 
more  dreadful  calamity  than  the  failure  of  life  insurance 
to  carry  out  its  high  mission?  We  have  a  keen  apprecia- 
tion of  what  it  would  have  meant  to  the  world  if  our 
experiment  in  free  government  had  failed.  At  the  same 
time,  we  don 't  forget  that  it  was  preserved  only  after  many 
bloody  pages  had  been  written  in  history.  We  know,  too, 
that  even  now  we  cannot  hold  our  hands  and  assume  that 
our  liberties  are  safe.  That  the  price  of  liberty  is  eternal 
vigilance  is  still  true  and  always  must  be. 

Life  Insurance,  I  profoundly  believe,  points  to  the 
solution  of  the  problems  which  underlie  the  socialistic 
tendencies  of  the  age.  Life  Insurance,  as  I  have  said,  is 
not  socialism.  Indeed  the  wider  its  dissemination  the 
more  improbable  the  success  of  most  socialistic  schemes. 
It  gives  no  charity.  It  takes  away  from  no  man  what 
belongs  to  him.  It  pledges  to  a  man's  family  a  value 
which  by  the  ordinary  rules  of  business  the  man  has  not 
earned;  but  the  value  is  in  his  life,  and  it  is  the  only 
known  process  by  which  that  value  can  be  justly  and  for 
value  received  transmuted  into  protection  for  dependents. 
If  Plato  was  right  when  he  said  the  only  real  things  in  the 
world  are  ideas,  then  life  insurance  is  creative.  Except 
through  the  instrumentality  of  the  securities  which  it  holds, 
it  does  not  take  the  ore  from  the  mine  and  build  a  locomotive. 
It  renders  what  is  perhaps  even  higher  service  than  that. 
It  does  not  join  issues  with  socialism  on  the  one  hand,  or 


108  Militant  Life  Insurance 

with  competition  on  the  other.  It  lets  competition  work  its 
will  in  the  current  affairs  of  men,  it  repudiates  the  es- 
sential doctrine  of  socialism  in  that  it  makes  every  man 
pay  for  all  he  gets.  It  conserves  and  preserves  and  binds 
together,  and  in  a  practicable  way  enforces  and  illus- 
trates the  solidarity  of  the  human  race.  It  merges  a 
man's  little  into  the  vast  possessions  of  the  many.  It 
takes  a  dollar  from  the  poor  and  so  invests  it  that  it  is 
guaranteed  not  by  any  single  enterprise  nor  by  any  single 
bond  nor  by  any  single  piece  of  real  estate,  but  by  the 
strength  of  many  bonds  and  the  value  of  much  real  es- 
tate. The  New- York  Life,  for  example,  is  an  aggrega- 
tion of  estates  representing  not  merely  the  money  that  the 
creators  of  these  estates  have  actually  paid  in, ,  but  to 
some  extent  at  least,  the  value  of  the  lives  of  the  creators. 
They  are  estates  instantly  created  and  as  certain  for  the 
family  of  the  man  who  dies  to-morrow  as  they  are  for  the 
man  who  dies  twenty  years  hence.  Small  wonder  that 
such  facts  as  these  are  beginning  to  attract  the  attention 
of  the  world.  Small  wonder  that  such  certainty  and  se- 
curity and  equity  appeals  to  the  man  who  otherwise  sees 
between  his  family  and  possible  want  only  the  uncertain 
length  of  his  own  days  and  the  doubtful  continuance  of 
his  own  health. 

I  should  lose  faith  in  the  permanence  of  our  institu- 
tions, in  the  justice  of  our  laws,  if  I  did  not  believe  that 
such  a  beneficent  plan  is  bound  to  grow  in  extent  and  in 
usefulness.  Bad  laws  may  be  passed  here  and  there 
through  misconstruction  or  misunderstanding  of  what 
has  been  done  or  left  undone,  but  the  good  sense  of  the 
people  will  see  beyond  all  that,  and  will  demand  that 
the  idea  be  carried  out  for  their  benefit.  Forwarding 
this  idea  is  our  task.  Your  part  in  it  as  policy-holders 
is  two-fold.  First,  to  watch  the  administration;  second, 
to  help  the  administration.  You  must  watch  the  admin- 


Some  Lessons  for  Policy-holders  109 

istration  just  as  you  watch  your  representatives  in  govern- 
ment. They  must  be  honest,  they  must  be  efficient.  If  they 
are  not,  you  must  turn  them  out.  The  individual  is  of  no 
consequence  except  as  he  can  forward  the  success  of  the 
enterprise  itself.  The  laws  demand  the  fullest  publicity, 
and  no  management  of  any  responsible  Company,  so  far 
as  I  know,  is  disposed  in  any  way  to  evade  the  obliga- 
tion of  these  laws.  The  larger  the  Company,  the  fiercer  the 
light  which  beats  upon  it,  the  more  it  must  be  able  to  stand 
as  against  any  criticism  that  can  be  offered  by  any  fair- 
minded  man.  On  the  other  hand,  you  must  help  the 
administration,  and  that  is  a  very  important  part  of 
What  I  want  to  say.  We  are  subject  in  the  United 
States  alone  to  the  supervision  of  forty-five  separate 
States,  each  with  its  own  Legislature,  its  own  Execu- 
tive, and  its  own  Judiciary.  If  we  do  business  in 
those  States,  we  must  comply  with  the  laws  of  the 
States,  but  it  goes  without  saying  that  in  so  many 
Legislatures,  human  nature  being  what  it  is,  many  bad 
laws  are  proposed,  and  sometimes  bad  laws  are  passed. 
In  the  interest  of  the  policy-holders,  we  are  bound  to 
oppose  the  passage  of  certain  propositions.  We  would 
be  recreant  to  our  duty  if  we  did  not.  But  that  oppo- 
sition must  always  be  in  the  open,  and  its  methods  must 
always  be  those  that  can  bear  the  light  of  day.  We  all 
know  something  of  how  Legislatures  operate.  We  all 
know  something  of  the  methods  which  it  is  supposed 
must  be  employed  to  forward  or  defeat  legislation.  I 
realize  that  I  shall  be  considered  visionary  by  many  peo- 
ple if  I  say  that  our  method  of  appeal  to  the  Legislatures 
hereafter  will  be  largely  the  voice  of  the  policy-holders 
themselves  in  each  separate  State.  The  practical  man 
will  think  that  plan  must  fail.  Perhaps  it  will.  But,  sup- 
plementing pleas  made  before  Legislative  Committees,  it  is 
the  only  plan  that  we  can  follow.  For  example,  take 


110  Militant  Life  Insurance 

your  own  State,  Illinois.  If  bad  legislation  is  intro- 
duced, and  it  may  be,  I  shall  very  likely  directly  appeal 
to  every  policy-holder  of  the  Company  living  in  the  State, 
I  shall  tell  him  why  the  proposed  measure  is  wrong,  why 
it  is  unjust,  and  why  we  cannot  comply  with  it  if  such 
be  the  case.  I  shall  ask  him  to  look  after  his  own  inter- 
est, to  present  the  case  to  his  representative  or  to  his 
Senator,  to  talk  it  over  with  his  neighbor,  in  order  if 
possible  to  build  up  a  body  of  public  opinion  to  which  the 
Legislature  will  listen.  If  the  policy-holders  refuse  to 
respond  to  such  pleas,  if  they  refuse  to  appreciate  not 
only  the  value  of  their  contract  in  the  Company  but  their 
obligation  to  the  men  all  over  the  world  with  whom  they 
have  associated  themselves,  then  they  will  be  as  rec- 
reant to  their  duty  as  the  man  who  fails  to  vote  on 
election  day,  or  the  man  who  sits  idly  by  knowing  that  in 
the  organization  of  his  Town  or  his  County  or  his  State 
dishonesty  is  rampant. 

We  have  been  obliged  already  to  retire  from  one  of  the 
great  States  of  the  Union;  the  fifth  State,  as  a  matter  of 
fact,  in  point  of  importance  in  the  organization  of  this 
Company.  I  don't  need  to  say  that  we  retired  with  pro- 
found regret,  only  because  our  duty  to  the  policy-holders 
in  the  State  itself  made  it  imperative  that  we  should  do 
so.  The  Texas  law  was  enacted  under  the  plea  that  money 
had  been  taken  from  Texas  and  invested  elsewhere.  The 
readiest  expression  for  this  was  that  the  money  was  used 
to  "gamble  in  Wall  Street".  As  a  matter  of  fact,  our 
investments  in  Texas  at  the  time  were  quite  as  large  as  the 
reserve  on  our  business  in  that  State;  and  between  pay- 
ments made  to  policy-holders  and  investments  in  what  are 
properly  Texas  securities,  we  have  returned  to  the  State 
every  dollar  that  the  business  of  the  State  on  any  theory 
could  claim.  Let  me  illustrate  our  theory  of  investment  by 
citing  what  we  have  now  in  securities  affecting  the  City  of 


Some  Lessons  for  Policy-holders  111 

Chicago  and  the  State  of  Illinois.  By  the  standard  set  up 
in  Texas,  a  Legislator  of  this  State  might  hold  that  the 
only  investments  we  have  in  Illinois  are  our  real  estate 
mortgages,  which  amount  to  about  $1,750,000,  our  policy 
loans,  which  amount  to  a  little  over  $1,250,000,  and  our 
municipal  bonds,  which  amount  to  $2,000,000.  But  what 
are  the  facts?  We  own  the  bonds  of  railroads  in  or  enter- 
ing the  City  of  Chicago,  together  with  municipal  and  other 
corporation  bonds  amounting  to  $85,600,000 ;  we  own  bonds 
of  railroads  the  systems  of  which  enter  Chicago  and  are 
direct  arteries  of  the  commerce  and  trade  of  Chicago,  ag- 
gregating $50,500,000  more.  The  total  holdings  of  bonds 
by  the  New- York  Life  in  enterprises  which  directly 
or  indirectly  influence  the  growth  and  well-being  of 
Chicago  amount  to  $136,000,000.  Add  the  $3,000,000 
real  estate  mortgages  and  policy  loans,  and  the  municipal 
and  other  bonds  which  represent  other  Illinois  enter- 
prises, and  you  have  in  round  figures  nearly  $143,000,000 
invested  in  this  way.  With  just  as  much  propriety  as  the 
cry  was  made  in  Texas  could  it  be  said  that  this  money 
has  been  taken  out  of  the  State,  taken  to  New  York,  and 
not  returned.  It  has  been  returned.  The  policy-holders' 
money  represented  by  these  bonds  is  in  the  State  and  in 
the  City  in  the  truest  sense.  It  is  invested  in  the  judgment 
of  the  Trustees  who  are  responsible.  It  is  wisely  invested. 
It  is  serving  the  policy-holders  and  serving  them  well.  If 
the  time  should  come  when  legislation  like  that  in  Texas 
is  proposed  in  Illinois,  these  are  the  facts  which  I  should 
endeavor  to  put  in  the  hands  of  every  man  who  holds  a 
contract  in  this  State  with  the  New- York  Life.  If  by  such 
methods  I  can  awaken  the  membership  of  the  Company  to 
the  keener  interest  that  comes  with  better  knowledge,  and 
by  that  means,  perhaps,  spread  that  interest  and  knowledge 
to  policy-holders  in  other  Companies,  we  can  make  public 
opinion  and  make  it  quickly.  We  can  go  far  towards  solving 


112  Militant  Life  Insurance 

the  ugliest  question  which  faces  life  insurance  management 
to-day,  and  that  is  legislation  based  on  prejudice  and  mis- 
understanding and  largely  inspired  by  political  ambition. 
The  policy-holders  can  readily  make  themselves  heard 
if  they  will,  and  they  will  if  once  they  appreciate  their 
rights  and  understand  the  danger. 

The  policy-holders  have  been  told  many  things  in 
two  years.  They  have  been  confused  and  alarmed. 
Some  degree  of  alarm  was  certainly  warranted.  But  the 
confusion  is  passing.  The  alarm  is  subsiding.  Confi- 
dence is  returning.  The  irrevocable  past,  with  its  bitter 
lessons,  with  its  justice  and  its  cruel  injustice,  stands  as 
a  silent  monitor  over  all  future  administration.  With 
truer  vision,  with  better  knowledge,  and  with  saner  judg- 
ments, these  facts  at  least  are  clear  to  the  policy-holders. 
1st.  That  their  contracts  are  safe  and  their  Com- 
panies sound. 

2d.  That  their  life  insurance  protection  rests  on  an 
idea  which  is  national  and  even  international 
in  its  scope,  and  cannot,  therefore,  perform  its 
best  service  if  unreasonably  burdened  and  re- 
stricted by  local  politics  or  local  interests. 
3d.  That  payment  of  premiums  does  not  complete 
a  man's  obligation  to  his  Company;  just  as 
voting  doesn't  fulfil  a  man's  duty  to  society. 
The  good  citizen  supports  good  government 
and  condemns  bad  administration  in  a  thou- 
sand ways.  So  must  the  policy-holder  do. 
4th.  That  demagogues  may  discover  in  mutual  life 
insurance  a  new  field  of  opportunity.  This  is 
an  old  danger  in  a  new  form,  and  a  very  real 
one  just  now. 

We  have  all  learned  our  lesson.    We  have  a  clearer  grip 
on  what  life   insurance  is  and  ought  to  be.    We  know 


Some  Lessons  for  Policy-holders  113 

that  life  insurance  will  go  on  to  the  fulfilment  of  its  high 
purpose.  Legislatures  may  hinder  it.  Taxation  may 
burden  it.  Demagogues  may  use  it  for  unworthy  pur- 
poses. Indifferent  and  even  bad  administration  may  now 
and  then  put  it  to  shame.  But  it  will  go  on,  because  the 
public  interest  demands  it. 


THE  FUTURE  OF 
AMERICAN  LIFE  INSURANCE 


AN  ADDRESS  BEFORE  THE  NATIONAL   CONVENTION   OF   INSURANCE    COMMISSIONERS, 
AT  RICHMOND,  VIRGINIA,  SEPTEMBER  17,  1907 


,HE  role  of  the  prophet  is  confessedly  a 
difficult  one,  and  yet  every  man  whose 
work  is  especially  valuable  to  the  world 
is  consciously  or  unconsciously  a  prophet. 
Every  one  who  accomplishes  anything 
worth  while  works  on  the  assumption 
that  within  certain  limits  he  knows  ap- 
proximately what  will  happen.  The 
broader  his  view  and  the  keener  his 
vision,  the  more  valuable  his  work  will  be.  In  pure 
mathematics  it  is  assumed  that  the  demonstrated  truths 
respecting  straight  lines,  angles,  and  curves,  will  prove 
true  throughout  all  space  and  in  all  time,  and  upon  this 
assumption  the  astronomer  measures  the  orbit  of  the 
earth,  calculates  the  magnitude  of  the  sun,  and  predicts 
the  return  of  the  comet.  While  we  may  not  be  able  in  the 
consideration  of  business  problems  to  ascertain  all  the 
forces  that  are  at  work,  or  to  calculate  accurately  their 

114 


The  Future  of  American  Life  Insurance          115 

magnitude  and  direction,  still  there  are  in  every  great 
business  certain  underlying  principles  the  tendency  and 
effect  of  which  may  be  approximately  known.  This  is 
especially  true  where  the  working  of  such  principles  in 
the  past  may  be  observed  through  a  series  of  years  during 
which  they  have  encountered  the  opposition  that  great 
principles  always  meet  and  have  demonstrated  both  their 
vitality  and  the  direction  of  their  growth. 

If,  therefore,  we  are  able  to  forecast  in  any  degree  the 
future  of  American  Life  Insurance,  it  must  be  by  a  con- 
sideration of  its  intrinsic  nature  and  its  relation  to  other 
great  forces  of  the  time,  the  results  which  have  attended 
its  operation  hitherto  and  the  influences  which  will  prob- 
ably shape  its  course  hereafter.  If  we  consider  the  in- 
trinsic nature  of  life  insurance,  we  must  conclude  that  its 
future  can  no  more  be  a  matter  of  doubt  than  the  future 
of  civilization  itself.  Is  there  any  doubt  about  the 
future  of  our  civilization?  Will  the  twentieth  century 
distinctly  lead  the  nineteenth?  Is  the  unmistakable  im- 
petus given  to  the  world  by  the  development  of  our 
government  and  our  country  to  go  on?  It  would  be  diffi- 
cult to  get  a  negative  to  such  questions  in  this  audience, 
or  in  any  audience  of  representative  American  citizens. 

What  is  there  in  the  nature  of  life  insurance  which 
makes  it  in  some  form  necessary  to  an  advanced  and  an 
advancing  civilization  ?  What  is  the  height  and  depth,  the 
length  and  breadth  of  the  appeal  which  it  makes  to  every 
properly-constituted  man?  Briefly,  it  covers  two  risks, 
risks  as  old  as  organized  society,  risks  as  universal  as  life, 
risks  which  involve  all  that  is  best  in  human  affection, 
risks  which  uncovered  bear  heavily  on  the  State.  It  as- 
sumes that  life  has  a  money  value, — an  assumption  that  no 
intelligent  man  any  longer  questions.  It  transmutes  this 
value  immediately  into  money  in  case  of  premature  death, 
and  in  so  doing  it  accumulates  a  sum  of  money  which  be- 


116  Militant  Life  Insurance 

comes  available  in  old  age.  Uncovered,  the  loss  occasioned 
by  premature  death  is  serious  and  sometimes  so  grievous 
as  to  be  appalling.  Life  insurance  protects  the  family 
of  the  man  who  has  accumulated  but  little  from  a  fate 
which  he  cannot  himself  think  of  without  a  shudder. 
The  other  risk,  the  risk  of  poverty  in  old  age,  is  just 
as  real  as  the  risk  of  premature  death.  The  poverty  of 
many  elderly  men  who  have  worked  hard  all  their  lives 
and  perhaps  have  at  some  time  been  men  of  wealth,  is  a 
matter  of  common  knowledge.  To  enumerate  the  causes 
would  be  as  useless  for  my  purposes  as  to  enumerate  the 
diseases  by  reason  of  which  men  die.  They  are  many  and 
they  are  effective.  The  risk  is  there  and  the  fact  is  there 
and  he  who  runs  may  read.  Against  both  of  these  risks 
life  insurance  undertakes  to  provide.  It  appeals,  there- 
fore, directly  to  the  conjugal  and  parental  affections  and 
answers  the  question  of  that  almost  divine  spirit  which 
leads  men  to  make  any  sacrifice  and  undergo  any  hard- 
ship in  order  to  provide  for  the  present  and  the  future  of 
their  families,  and  for  their  own  old  age. 

A  man  who  assumed  the  role  of  prophet  with  respect 
to  American  life  insurance  sixty  years  ago  would  have 
had  to  deal  with  entirely  different  conditions  from  those 
which  confront  us.  Most  of  the  problems  which  he  would 
have  had  to  take  into  account  have  been  worked  out  to 
a  conclusion.  Even  the  superstition  which  made  men 
hesitate  because  life  insurance  dealt  with  that  mysteri- 
ous thing  called  death  has  been  largely  eliminated. 
In  forecasting  the  future  of  life  insurance  what  was 
then  a  matter  of  experiment  is  now  a  matter  of  fact. 
Tables  of  mortality  have  been  established  beyond  perad- 
venture.  Our  assumptions  of  interest  earnings  are  suf- 
ficient, and  in  the  light  of  present  developments  probably 
more  than  sufficient.  Through  the  vigorous  and  aggressive 
work  of  American  companies  opposition  has  been  beaten 


The  Future  of  American  Life  Insurance          117 

down,  and  of  the  original  factors  in  prophecy,  manage- 
ment— its  efficiency  and  integrity — alone  remains. 

But  new  problems  have  arisen,  and,  if  we  prophesy,  we 
must  take  into  account  factors  which  the  earlier  prophet 
knew  nothing  about.  The  appeals  of  the  earlier  mission- 
aries of  life  insurance  and  their  successors  have  been  mag- 
nificently answered.  At  the  end  of  less  than  seventy  years' 
active  work  in  this  country,  the  number  of  policies  in  force 
is  greater  than  one-fourth  of  the  entire  population,  and  if 
the  accumulated  assets  of  the  companies  were  turned  into 
cash  and  locked  up,  there  would  not  be  a  dollar  with  which 
to  do  business.  These  years  of  growth  have  been  rich  in 
experience.  So  rapid  has  been  its  expansion,  so  powerful 
has  become  its  function  in  society  that  life  insurance  is 
now  more  completely  regulated  by  the  State  than  any 
other  business.  This  relation  to  the  State  grew  up  as 
the  business  expanded,  and  now  substantially  every 
country  of  the  world  and  every  State  of  the  United  States 
has  a  special  department  of  government  created  to  super- 
vise insurance.  This  has  gone  so  far  that  the  State  now 
fixes  the  conditions  of  organization  of  life  companies,  the 
status  and  compensation  of  their  agents,  the  form  of 
policy  they  may  issue,  the  securities  they  may  purchase, 
the  reports  they  must  make,  the  standard  of  solvency  they 
must  maintain,  the  maximum  surplus  they  may  hold, 
the  amount  of  new  business  they  may  do,  and  the  maxi- 
mum limit  of  expenses.  Life  insurance  has  become  a  great 
public  question. 


What  are  the  forces  which  will  demand  that  it  go  on  to 
a  larger  usefulness  ?  What  are  the  forces  which  will  ham- 
per it  and  hinder  its  growth  ? 

No  one  will  deny  that  during  the  past  sixty  years  there 
has  been  a  marked  increase  in  what  I  may  call  the  humane 


118  Militant  Life  Insurance 

spirit,  which  is  only  another  name  for  the  spirit  of 
justice  tempered  by  mercy  toward  the  weak  and  the  un- 
fortunate. It  was  this  spirit  that  sealed  the  doom  of 
African  slavery  on  this  continent.  It  has  effected  many 
reforms  in  the  laws  respecting  women  and  children.  It 
carries  on  settlement  work  in  the  slums  of  our  great  cities. 
It  builds  and  maintains  orphan  asylums,  industrial  schools, 
homes  for  the  aged,  and  unfortunate.  It  springs  to  the 
relief  of  communities  suffering  by  disaster  from  fire  or 
flood  or  earthquake  or  famine.  Life  has  come  to  be  re- 
garded as  something  sacred,  and  the  demand  that  it  shall 
not  be  needlessly  sacrificed  finds  expression  in  safety  ap- 
pliances in  manufacturing,  mining,  and  transportation 
companies.  The  movement  is  general.  It  has  even  broken 
through  the  conservatism  of  China. 

During  this  same  period  there  has  been  a  great  increase 
in  the  productiveness  of  human  life,  and  consequently  in 
its  pecuniary  value.  This  increase  has  come  about  largely 
by  the  more  general  use  of  machinery  and  the  organiza- 
tion of  the  forces  of  production  and  distribution.  Im- 
proved methods  have  not  only  made  all  labor  more  valu- 
able, but  have  also  shown  the  value  of  intelligence  and  the 
exceptional  value  of  men  capable  of  organizing  and  devel- 
oping large  plants  of  every  kind.  This  increase  in  the  pro- 
ductiveness and  value  of  human  life  has  been  coincident 
with  a  marvelous  increase  in  the  per  capita  wealth  of  the 
nation,  and  in  the  cost  of  living  and  the  standards  of 
comfort  of  the  people  generally. 

At  the  same  time,  there  has  developed  an  increasing 
disposition  to  cover  the  risk  of  loss  of  all  kinds  by  insur- 
ance. For  example,  loss  by  fire,  by  casualties,  by  theft, 
by  sickness,  by  burglary,  by  any  of  the  vicissitudes  of  life. 

If  we  were  to  consider  only  these  elements :  the  service 
which  life  insurance  performs ;  its  wonderful  growth ;  the 
expansion  of  conditions  which  increases  its  opportunities ; 


The  Future  of  American  Life  Insurance          119 

the  general  movement  toward  better  conditions,  in  which 
life  insurance  is  a  constantly  increasing  force,  our  horo- 
scope could  be  quickly  cast  and  it  would  be  altogether 
cheerful  and  optimistic,  but  before  we  cast  that  horoscope 
we  must  consider  some  other  factors. 


What  are  the  forces  which  will  hamper  the  develop- 
ment of  American  life  insurance? 

Assuming  competent  and  honest  management,  the 
greatest  menace  to  the  future  of  American  life  insurance, 
lies  in  an  increasing  tendency  on  the  part  of  the  various 
States  of  the  Union  to  treat  life  insurance  as  a  local 
question,  and  to  legislate  from  the  local  view-point. 

Whether  that  tendency  is  wisely  or  unwisely  governed 
and  directed  is  largely  within  the  control  of  the  members 
of  this  Convention  and  their  successors.  Tell  me  what 
your  attitude  will  be,  what  the  attitude  of  your  successors 
will  be,  and  I  can  tell  you  what  the  future  of  American 
life  insurance  will  be. 

The  fact  that  you  are  assembled  here  to-day,  that  you 
have  a  national  organization,  shows  that  you  recognize 
an  obligation  which  reaches  beyond  the  borders  of  your 
own  States.  Whatever  may  be  true  of  any  other  business, 
it  is  certainly  true  that  the  business  done  by  any  given 
life  company  in  California  must  be  administered  by  Cali- 
fornia with  a  certain  regard  to  how  corresponding  inter- 
ests in  New  York  are  administered  by  New  York.  Not- 
withstanding the  logic  of  the  Supreme  Court  of  the  United 
States  which  says  that  insurance  is  not  commerce  and 
that  a  contract  of  insurance  is  not  an  instrumentality  of 
commerce,  life  insurance  will  be  justly  supervised  only 
when  each  State  treats  the  business  done  in  that  State  as 
though  it  were  interstate  commerce  and  to  be  dealt  with 
as  a  Federal  question. 


120  Militant  Life  Insurance 

Local  pride  and  local  prejudice  in  a  government  like 
ours  are  very  difficult  things  to  deal  with.  Indeed  the 
feeling  is  not  limited  to  any  country  or  to  any  people. 
For  example,  at  the  present  time,  a  serious  political  situa- 
tion exists  in  Italy  because  of  a  defaulting  ex-Minister 
who  has  been  placed  under  arrest  at  the  order  of  the 
President  of  the  Senate.  This  particular  minister  hap- 
pened to  come  from  Sicily,  and  Sicily  has  been  very  proud 
of  him.  That  he  stole  enormous  sums  from  the  Treasury, 
fitted  up  his  residences  with  objects  of  art  belonging 
to  the  State,  and  granted  teachers'  pensions  to  laborers, 
women,  and  children  in  arms  doesn't  matter.  He  is  from 
Sicily.  We  may  have  no  exact  parallel  to  this  in  our  own 
politics,  but  the  same  spirit  is  present  everywhere.  The 
Congressman  or  the  Senator  who  gets  an  appropriation 
for  a  post-office  is  reasonably  certain  of  local  approval 
without  much  regard  to  the  methods  by  which  the  appro- 
priation was  secured. 

Under  this  heading  let  us  consider  some  specific  dan- 
gers arising  almost  entirely  from  the  demand  of  local 
interests;  let  us  review  some  types  of  legislation  with 
which  you  will  have  to  deal, — legislation  which  has  been 
getting  a  firmer  grip  year  by  year,  adding  burdens  to  the 
thrifty,  taking  money  unjustly  from  the  pockets  of  policy- 
holders,  and  finally  reaching  a  point  where  it  has  become 
a  menace  to  administration  and  to  solvency. 

In  New  York  State,  legislation  has  already  put  a  limi- 
tation upon  the  amount  of  surplus  that  a  company  may 
have.  In  Texas  it  has  undertaken  to  compel  life  insurance 
trustees  to  purchase  local  securities,  whether  they  approve 
of  them  or  not,  and,  in  addition,  has  undertaken  to  place 
those  securities  within  the  reach  of  local  authorities  for 
local  taxation.  In  New  York  State  it  has  put  an  arbitrary 
limitation  not  only  upon  what  shall  be  paid  for  new  busi- 
ness, but  on  the  amount  of  business  a  company  may  do. 


The  Future  of  American  Life  Insurance          121 

In  Wisconsin  it  has  fixed  the  maximum  premium  which  a 
company  may  charge.*  In  Missouri  it  has  placed  a  limit 
on  the  amount  of  salary  which  may  be  paid  to  an  officer 
of  an  insurance  company  under  any  condition.  In  a  con- 
siderable number  of  States  it  has  denied  foreign  com- 
panies the  protection  of  the  Federal  Courts.  In  nearly  all 
the  States  it  has  steadily  increased  taxation  of  premiums, 
sometimes  directly  and  sometimes  through  what  are 
known  as  retaliatory  statutes. 

All  these  measures  are  restrictive  and  radical,  some  are 
revolutionary,  some  are  dangerous. 

Let  us  consider  a  few  of  them  a  little  more  in  detail : 

How  much  surplus  should  a  life  company  be  allowed 
to  accumulate  as  a  contingency  fund?  The  State  of  New 
York  has  recently  decreed  that  the  percentage  of  surplus 
thus  held  shall  decrease  according  to  a  fixed  scale  as  the 
policy  reserve  increases.  Under  the  scale  established  a 
company  with  reserve  liability  of  $100,000  or  less  may 
hold  a  surplus  of  $10,000  or  20%  of  its  policy  reserve, 
whichever  is  the  larger.  A  company  with  reserve  liability 
of  $1,000,000  may  hold  only  15%  surplus,  a  company  with 
a  reserve  liability  of  $15,000,000  may  hold  only  10%  sur- 
plus, and  a  company  with  $75,000,000  or  more  of  reserve 
liability  may  hold  only  a  5%  surplus. 

The  first  phase  of  the  law  that  invites  comment  is  the 
underlying  assumption  that  the  small  company  is  liable  to 
loss  of  money  by  the  shrinkage  of  assets  and  in  other 
ways  in  larger  proportion  than  the  large  company.  Dur- 
ing the  investigation  which  preceded  this  legislation, 
criticism  centered  on  the  large  companies,  but  here  is  an 
assumption  in  their  favor  which  was  quite  unlooked  for. 
Even  if  we  admit  that  a  larger  margin  of  safety  should  be 
allowed  to  a  newly-organized  company  until  it  is  well 
established  and  has  assets  of  considerable  variety,  what 

*This  law  was  repealed  in  1911. 


122  Militant  Life  Insurance 

possible  reason  is  there  for  allowing  a  $15,000,000  com- 
pany a  percentage  of  surplus  twice  as  large  as  that 
allowed  a  $75,000,000  company?  If  the  liability  of  loss 
decreases  with  the  size  of  the  company,  why  not  continue 
the  reduction  to  zero?  Both  companies  might  have,  in- 
deed probably  would  have,  their  money  invested  in  iden- 
tical securities,  which  under  any  given  condition  would 
fluctuate  to  exactly  the  same  extent.  Of  course  the  prin- 
ciple represented  in  this  law  is  unsound,  and  its  present 
application  is  a  serious  menace. 

The  savings  banks  of  Greater  New  York  have  over 
$900,000,000  in  deposits,  and  a  surplus  of  over  $73,000,000, 
or  about  8%.  Those  with  deposits  under  $15,000,000 
have  a  surplus  on  an  average  of  6%,  those  between  $15,- 
000,000  and  $50,000,000  have  an  average  surplus  of  9%, 
and  those  with  over  $50,000,000  deposits  have  an  average 
surplus  of  nearly  8%.*  The  smaller  banks  have  a  smaller 
percentage  of  surplus,  those  of  intermediate  size  a  larger 
percentage,  and  no  class  has  so  small  an  average  as  5%. 
Can  any  one  tell  why  a  life  insurance  company  should 
not  be  allowed  as  large  a  surplus  as  a  savings  bank?  In 
one  respect  only  is  a  life  company  more  favorably  situated 
than  a  savings  bank :  its  customers  must  keep  on  making 
annual  payments,  a  quarter  of  which  is  "  loading "  and 
does  not  appear  in  its  liabilities,  but  on  the  other  hand  the 
investments  of  the  savings  bank  are  more  restricted  than 
those  of  the  insurance  company  and  should  on  general 
principles  be  less  liable  to  shrinkage  and  loss.  More- 
over, this  is  the  only  liability  to  loss  which  the  bank  has 
while  the  life  company  has  this  and  many  others  besides. 
The  bank  pays  interest  only  after  earning  it,  and  in 
accordance  with  its  earnings,  while  the  life  insurance 
company's  contracts  are  issued  on  the  assumption  that  it 
will  surely  earn  a  certain  rate  of  interest.  If  this  in- 

*World  Almanac  for  1907. 


The  Future  of  American  Life  Insurance          123 

terest  rate  declines,  not  only  does  the  company  earn  less 
for  surplus  but  the  State  may  step  in  and  increase  its 
liabilities.  Indeed  the  State  has  done  this  several  times. 
Since  the  organization  of  the  New  York  Insurance  De- 
partment in  1859,  the  State  has  had  four  standards  of 
liabilities  for  life  insurance  companies,  each  change  mak- 
ing the  liabilities  larger.  The  changes  in  the  rates  of 
interest  obtainable  have  sometimes  been  great  and  unex- 
pected. In  the  first  convention  held  by  this  body,  a  com- 
mittee of  actuaries  reported  that  the  interest  earnings  of 
life  companies  doing  business  in  Massachusetts  were  over 
6%.  Other  eminent  authorities  expressed  the  opinion 
that  5%  and  more  could  be  realized  for  a  genera- 
tion to  come,  and  pointed  to  the  fact  that  United 
States  5%  bonds  were  selling  at  par.  The  convention 
voted  for  a  4*^%  standard.  What  then  happened?  In 
1877  the  funding  operations  of  the  government  were  un- 
dertaken, and  it  was  demonstrated  that  government  bonds 
could  be  sold  on  a  4%  basis.  In  1884,  the  State  of  New 
York  enacted  a  4%  reserve  standard,  to  take  effect  on 
old  business  as  well  as  new  three  years  later.  This  change 
required  a  transfer  of  about  $35,000,000  from  surplus  to 
liabilities  by  companies  doing  business  in  the  State.  The 
percentage  of  surplus  to  liabilities  was  reduced  from  22% 
to  14% — thus  falling  eight  points,  which  is  three  points 
more  than  the  law  now  allows  the  large  companies 
to  hold.  That  the  change  was  wise  I  don't  question,  but 
it  could  not  have  been  made  if  the  companies,  in  the 
exercise  of  a  wise  conservatism,  had  not  accumulated 
large  surpluses  for  this  and  other  contingencies. 

The  law  not  only  fixes  a  standard  of  liabilities,  but  it 
also  makes  its  own  valuation  of  assets,  and  from  its  de- 
cision there  is  no  appeal.  The  value  of  securities  dealt  in 
on  the  public  exchanges  may  be  readily  ascertained;  the 
value  of  others  is  a  matter  of  opinion,  and  the  opinions 


124  Militant  Life  Insurance 

of  the  Insurance  Departments  are  not  always  the  same 
with  respect  to  these  values.  During  the  past  two  years 
we  have  had  some  striking  examples  of  fluctuations  in  the 
value  of  securities.*  British  Consols,  bonds  of  the  city  of 
New  York,  first-class  railroad  bonds,  have  all  declined, 
some  of  them  more  than  ten  per  cent.  In  its  last  year's 
report  the  Insurance  Department  of  the  State  of  New 
York  shows  a  reduction  in  the  valuation  of  one  company's 
real  estate  alone  of  over  2%  on  its  entire  policy  reserve. 
If  it  had  been  possible  in  April,  1906,  immediately  to  es- 
tablish surplus  in  the  great  mutual  companies  on  the  basis 
of  the  then  enacted  laws,  many  Trustees,  through  the 
shrinkage  in  market  values  which  has  occurred  within  two 
years,  would  now  be  faced  with  the  question  of  passing 
dividends  altogether,  and  technical  insolvency  would  be  in 
sight.  With  fluctuations  in  the  value  of  the  best  securi- 
ties, not  theoretically  possible  but  actual,  present,  and 
covering  a  wider  range  than  the  margins  allowed  by  law, 
how  is  management  to  do  justice  to  policy-holders?  How 
can  Trustees  avoid  paying  too  much  one  year  and  too 
little  the  next?  How  indeed  can  they  escape  the  most 
serious  consequences? 

The  present  danger  springs  from  high  rates  of  in- 
terest, low  prices  for  securities,  and  the  dangerously  small 
margins  allowed  by  New  York.  At  the  other  extreme 
there  is  a  danger  almost  equally  great.  When  securities 
are  high  and  interest  is  low,  the  State  might  be  com- 
pelled in  the  public  interest  to  change  the  reserve  stand- 
ard to  3%,  and  this  again  would  require  more  money  than 
the  law  permits  the  companies  to  hold  as  surplus. 

These  are  not  suppositions  made  for  argument's  sake, 
but  a  statement  of  facts  that  have  unexpectedly  developed 
since  the  passage  of  the  New  York  laws.  They  are  danger 


*See  memorandum  A  attached. 


The  Future  of  American  Life  Insurance          125 

signals,  which  you  who  are  largely  responsible  for  legisla- 
tion have  already  seen,  and  which  you  are  under  the  most 
solemn  obligations  to  heed. 

It  is  to  be  hoped  that  New  York's  bad  example  in  this 
particular  statute  will  not  be  followed,  and  it  is  not  be- 
yond hope  that  this  thoroughly  dangerous  law  may  soon 
be  repealed.* 

Again  what  should  be  your  attitude  in  the  matter  of 
taxation?  There  is  almost  a  rivalry  between  the  States  as 
to  which  will  impose  the  heaviest  burden  on  premiums. 

The  power  of  the  purse  and  the  power  of  the  sword  are 
twin  attributes  of  sovereignty.  Money  must  be  had  for 
the  purposes  of  government,  and  how  to  get  it  has  been  the 
problem  of  tyrants  and  patriots  alike.  The  political  life 
of  nations  has  often  surged  about  the  question  of  taxation, 
and  a  difference  of  opinion  on  this  subject  kindled  the 
spirit  of  independence  in  the  hearts  of  our  forefathers. 
The  tax  gatherer  sooner  or  later  lays  his  hands  upon  a  part 
of  everything  in  sight, — real  estate,  personal  property,  in- 
come, production,  transfers,  consumption,  inheritance.  He 
has  gone  even  farther  and  collected  taxes  on  space,  space 
left  open  in  the  walls  of  human  dwellings  that  sunlight 
might  come  in  and  banish  gloom  and  disease.  It  was 
hardly  to  be  expected  that  life  insurance  would  escape. 

While  I  would  not  to-day  argue  with  any  hope, 
for  entire  exemption  from  taxation,  let  us  briefly 
review  some  reasons  why  the  premiums  of  life 
insurance  ought  to  be  exempt.  Life  insurance  on 
the  mutual  plan  is  not  a  money-making  business;  it 
is  the  collection  and  disbursement  of  money  to  prevent 
poverty.  All  money  received  is  either  at  once  paid  out  in 
benefits  and  expenses  or  is  invested  and  pays  taxes  where 

•For  changes  In  the  Insurance  Law  of  New  York,  see  foot  notes 
to  address  on  "New  York  State  and  Life  Insurance  Legislation." 


126  Militant  Life  Insurance 

it  is  invested.  Life  insurance  premiums  are  a  self-imposed 
tax  which  prevent  burdens  upon  the  State,  and  a  tax  upon 
a  tax  is  barbarous.  The  taxation  of  life  insurance  pre- 
miums is  a  tax  upon  property  not  in  possession  and 
from  which  no  present  income  is  derived.  It  is  a  tax 
upon  a  trust  fund  held  for  the  fulfilment  of  contracts 
with  widows  and  orphans,  which  when  so  payable  is  by 
law  exempt  from  attachment  for  debt.  The  most  enlight- 
ened nations  of  Europe  have  fostered  the  system  because 
of  its  benefits  to  the  State,  and  some  of  them  exempt  from 
the  income  tax  within  certain  limitations  the  money  which 
a  man  devotes  to  life  insurance.  These  arguments  are  all 
founded  in  justice,  they  are  economically  sound,  but  they 
seem  practically  useless.  The  modern  legislator  says  in 
effect,  "You  have  money  to  spend  for  life  insurance,  then 
you  are  able  to  pay  taxes.  Give  the  State  a  part  and  buy 
less  insurance. "  And  so  a  man  sits  at  the  receipt  of 
customs  wherever  life  insurance  is  sold  in  this  country, 
save  in  Nevada,  Oklahoma  and  Alaska,  and  to  the  buyer 
who  wishes  $100  worth  of  life  insurance,  if  from  New 
York  he  says,  "Give  me  one  dollar",  if  from  Pennsylvania 
he  says,  "Give  me  two  dollars",  if  from  Ohio  he  says, 
"Give  me  two  dollars  and  a  half." 

The  tendency  for  many  years  has  been  to  take  more 
and  more.  There  is  no  uniformity  in  the  taking.  It  has 
come  to  be  a  game  of  grab.  Money  must  be  had;  policy- 
holders  are  more  or  less  defenceless.  This  is  an  easy 
way  to  get  money  for  the  State ;  whether  it  is  a  just  way 
or  a  proper  way  has  little  consideration. 


The  report  of  the  Committee  on  Insurance  Law  pre- 
sented at  the  meeting  of  the  American  Bar  Association  on 
August  26  last  dealt  with  this  and  other  phases  of  life 
insurance.  On  the  subject  of  taxation  the  report  said: 

"We  have  not  yet  in  this  year  of  grace  1907  risen 


The  Future  of  American  Life  Insurance          127 

above  the  idea  that  money  in  sight  belongs  to  him  who  can 
get  hold  of  it,  and  keep  it,  and  keep  out  of  jail." 

Again  the  report  says : 

"And  so  it  is  that  these  immense  sums  of  money  in  sight 
have  been  regarded  as  spoils  ********* 
by  a  number  of  State  Legislatures  which  with  little  know- 
ledge and  less  scruple  have  treated  as  legitimate  loot  these 
moneys  raised  by  voluntary  taxation  to  provide  against 
disaster  and  calamity.  *  *  *  The  individual  who  mis- 
appropriates trust  funds  deserves  censure  and  punish- 
ment, but  it  is  just  as  dishonest  to  steal  under  the  protec- 
tion of  law  as  without  it;  it  is  just  as  dishonest  for  the 
State  to  lay  unholy  hands  on  trust  funds  as  for  an  indi- 
vidual, and  the  States  commit  a  monstrous  injustice  when 
they  seek,  even  partially,  to  maintain  themselves  by  legis- 
lative raids  upon  trust  funds.  Moreover,  it  is  the  climax 
of  cowardice  to  commit  extortions  in  the  name  of  the 
police  power,  but  most  of  them  are  doing  it,  and  thus 
they  commit  the  identical  offence  which  they  condemn 
and  punish  in  the  individual." 

Under  the  plea  that  the  companies  should  pay  the 
expense  of  insurance  supervision  in  each  State,  the  taxes 
on  premiums  and  other  fees  have  been  gradually  in- 
creased until  now  they  amount  annually  to  several  million 
dollars  more  than  the  cost  of  supervision.  The  State  In- 
surance Commissioner  is  not  without  a  feeling  of  satisfac- 
tion over  the  fact  that  the  taxes  collected  in  his  Depart- 
ment during  the  year  paid  the  expenses  of  the  Department 
and  added  thousands  of  dollars  to  the  general  income  of 
the  State. 

I  cannot  resist  the  conclusion  that  under  your  leader- 
ship the  States  will  some  day  recognize  the  brutal  injustice 
of  this  program  and  relieve  the  policy-holders  of  this  bur- 
den. But  to-day  I  am  dealing  with  things  that  are  prob- 
able, and,  recognizing  the  certainty  that  these  taxes  will 


128  Militant  Life  Insurance 

continue  for  some  time  I  urge  you  to  adopt  some  uniform 
scale,  and  if  you  feel  that  it  is  honorable  and  just  to  take 
from  these  funds  more  than  the  cost  of  supervision,  take 
only  this  scale  and  take  it  everywhere. 

At  the  present  time,  with  the  exception  of  Nevada,  the 
States  take  from  one  to  three  per  cent.*  of  the  premiums 
paid,  in  some  cases  deducting  dividends,  death  losses,  etc., 
and  in  others  collecting  it  on  the  gross  amount.  Then 
there  are  the  license  and  other  fees  exacted  by  the  State ; 
there  are  taxes  on  personal  property;  there  are  the  fees 
for  the  agents'  licenses,  and  in  some  States,  especially  in 
the  South,  certain  municipalities  step  in  and  in  addition 
to  what  the  State  exacts  charge  both  the  company  and  the 
agent  for  the  privilege  of  doing  business;  then  certain 
cities  demand  a  percentage  of  the  premiums  paid  in  their 
jurisdiction ;  and,  finally,  in  one  or  two  States,  the  counties 
make  a  similar  demand. 

The  effect  of  this,  of  course,  is  that  the  State  violates 
the  principle  of  mutuality.  Each  State  insists  that  divi- 
dends shall  be  uniform,  that  the  man  insured  at  age 
twenty-five  on  the  Ordinary  Life  Plan  shall  receive  the 
dividend  paid  in  every  other  State  on  identical  contracts, 
notwithstanding  the  fact  that  one  State  may  have  been 
collecting  2y2%  each  year  of  all  the  premiums  paid, 
while  another  State  may  have  collected  only  1%. 
Of  course  the  State  in  no  case  intends  an  injustice.  It 
is  simply  the  temptation  of  "money  in  sight ".  But  in 
these  days,  when  Trustees  are  being  held  to  a  finer 
sense  of  trusteeship,  when  the  demand  is  made  that  life 
insurance  moneys  shall  be  more  safely  held  and  more 
carefully  accounted  for,  what  worthier  object  can  engage 
your  attention  than  a  movement  amongst  the  Insurance 
Commissioners  of  the  country,  first  to  protest  against  the 


*See  memorandum  B  attached. 


The  Future  of  American  Life  Insurance          129 

injustice  of  any  taxation  on  premiums,  and  then,  if  that 
seems  impracticable,  to  insist  that  the  burden  shall  be 
fairly  distributed. 

It  has  been  alleged  that  life  insurance  managements 
have  sometimes  violated  the  principles  of  mutuality.  If 
that  be  true,  it  was  a  grievous  offence,  but  how  much  more 
grievous  is  the  offence  when  the  principle  is  violated 
by  the  State. 

Another  tendency  in  legislation  with  which  you  must 
deal  is  that  which  would  compel  investments  in  local  se- 
curities and  require  deposit  of  those  securities  where  they 
can  be  locally  taxed.  Here  legislation  from  the  local 
as  opposed  to  the  national  view-point  takes  on  one  of 
its  radical  forms.  Of  course  the  State  which  charters 
a  company  may  properly  prescribe  the  securities  in  which 
it  may  invest  its  funds;  but  even  if  it  is  constitutional 
is  it  wise  for  every  other  State  to  assume  to  exercise 
the  same  authority?  In  dealing  with  the  right  of  life 
companies  to  appeal  to  the  Federal  Courts,  the  Supreme 
Court  of  the  United  States  has  seemed  to  hesitate  at 
times,  and  its  judgments  have,  I  think,  in  every  case 
been  delivered  by  a  divided  Court.  But  the  doctrine 
that  a  State  may  prescribe  the  conditions  under  which 
a  corporation  may  do  business  within  its  borders  is  proba- 
bly finally  established.  This  should  not,  however,  end 
the  question  with  you.  The  problem  as  to  the  wisdom 
of  such  a  doctrine  still  remains.  Is  it  economically 
sound?  Does  it  not  from  your  view-point  immediately 
interfere  with  the  proper  and  desirable  growth  and  ex- 
pansion of  a  beneficent  idea? 

The  laws  of  New  York  prescribe  that  life  insur- 
ance funds  shall  be  invested  in  securities  of  a  high 
standard,  but  leave  the  Directors  to  find  such  securi- 
ties wherever  they  can.  The  responsibility  of  selec- 
tion cannot  be  safely  shared  with  the  law-making 


130  Militant  Life  Insurance 

bodies  of  the  various  States  of  the  Union.  That 
proposition  is  elementary,  and  unless  a  State  is 
willing  to  guarantee  the  sufficiency  of  the  securities 
which  it  would  compel  a  life  insurance  company  to  pur- 
chase, and  thereby  give  something  in  return  for  the  dis- 
cretion which  it  would  take  away  from  Trustees,  it  is 
inviting,  almost  compelling,  disaster.  If  the  State  should 
find  a  Trustee  of  any  particular  company  forcing  securi- 
ties in  which  he  was  personally  interested  upon  the  Fi- 
nance Committee,  it  could  and  would  send  him  to  jail.  In 
what  respect  is  the  morality  of  a  law  compelling  Finance 
Committees  to  buy  securities  in  which  the  State  is  con- 
fessedly interested  better  or  higher  than  the  morality  of  a 
Trustee  who  uses  his  position  for  his  own  benefit?  Then 
suppose  that  every  State  should  enact  such  a  law,  and 
suppose  that  one  of  the  large  companies  undertook  to 
comply  with  all  of  them.  What  condition  would  that  com- 
pany speedily  find  itself  in?  Could  responsible  men  then 
be  had  to  act  as  Trustees  ?  Would  assets  be  safe?  Would 
policies  continue  to  be  paid  at  maturity?  These  questions 
answer  themselves.  The  States  have  a  right  to  pass  such 
laws,  but  they  also  have  the  right  to  say  bluntly  to  a  life 
company  that  it  shall  not  transact  business  within  its 
borders  on  any  conditions.  This  would  be  the  more  hon- 
orable plan.  To  deny  that  this  Nation  is  a  union  of  States 
and  that  under  the  Federal  compact  commerce  among 
them  is  to  be  encouraged  would  be  more  defensible  than  to 
set  legislative  traps  in  which  companies  may  be  caught. 
Closely  allied  to  this  kind  of  legislation  is  the  prohi- 
bition already  written  in  the  statutes  of  several  States 
against  removing  a  case  from  the  State  to  the  Federal 
Courts.  There  has  been  a  good  deal  of  discussion  lately 
over  events  in  North  Carolina  and  in  Alabama,  involving 
the  relation  of  the  States  and  the  Federal  Government, 
but  the  doctrine  involved  in  the  cases  against  certain 


The  Future  of  American  Life  Insurance          131 

railroads  is  not  new,  and  life  insurance  has  long  been 
compelled  in  effect  to  surrender  the  rights  guaranteed  to 
it  by  the  Constitution  in  order  to  transact  business  in 
some  of  the  States.  Such  laws  exist  in  North  Carolina, 
where  a  company  is  compelled  not  only  to  agree  that  it 
will  not  remove  to  United  States  Circuit  or  District  Courts 
any  action  instituted  against  it,  but  that  it  will  not  insti- 
tute any  action  in  equity  in  United  States  Courts  against 
any  citizen  of  that  State  growing  out  of  any  policy  of 
insurance.  In  New  York  the  law  says  that  the  Superin- 
tendent "shall  revoke  the  certificate  of  authority"  of  any 
foreign  corporation  if  it  applies  to  have  a  case  removed 
into  the  United  States  Courts.  The  same  or  a  similar 
law  exists  in  North  Dakota,  in  California,  Colorado,  Illi- 
nois, Kentucky,  Mississippi,  Missouri,  Nebraska,  New 
Hampshire,  Ohio,  South  Dakota,  Texas,  and  Wisconsin. 
Some  of  these  laws  have  been  in  existence  for  nearly 
thirty  years. 

The  above  States  have  declared  in  effect  that  the 
Trustees  of  a  life  insurance  company  in  the  discharge 
of  their  duty  shall  be  denied  the  protection  of  the  Federal 
Courts.  This,  or  no  business  in  these  States. 

Another  tendency  which  will  probably  not  run  far  is  to 
limit  by  law  the  amount  of  business  which  a  company  may 
do.  I  have  observed  little  disposition  in  other  States  to 
follow  the  bad  example  of  New  York  in  this  respect.  Of 
course  the  legislation  is  economically  unsound.  To  limit 
the  amount  of  business  which  a  company  may  do,  after 
having  limited  the  cost  of  the  business,  is  directly  contrary 
to  the  principle  that  is  everywhere  else  now  so  strenuously 
maintained,  namely,  that  competition  is  the  proper  regu- 
lating force  in  business.  The  National  Government  es- 
pecially is  moving  Heaven  and  earth  to  prevent  the  stifling 
of  competition,  but  New  York  State  at  least  maintains  that 
beyond  a  certain  point  a  life  company  shall  not  compete 


132  Militant  Life  Insurance 

for  business  on  any  terms.  That  company  may  be  furnish- 
ing insurance  at  the  lowest  cost,  but  after  furnishing  a 
certain  amount  in  any  one  year  it  must  stand  aside  and 
let  others  compete  for  whatever  remains,  whatever  the 
cost  may  chance  to  be.  The  State  virtually  says  to  the 
insurer, '  *  You  may  have  insurance  not  where  you  will,  but 
where  others  will  not." 

These  types  of  legislation  are  a  natural  outgrowth  of 
our  system  of  government  under  the  Federated  States. 
They  have  year  by  year  become  more  aggressive.  Always 
wrong  in  principle,  they  attracted  but  little  attention 
until  they  have  reached  the  point  where  they  are  not 
merely  a  burden  on  the  policy-holders  but  a  serious 
restraint  upon  the  healthy  expansion  of  the  business. 
There  is  great  danger  that  legislation  of  this  kind  will 
reach  still  farther,  and  the  thoughtful  man  might  conclude 
that  between  the  inequities  and  iniquities  of  taxation, 
dangerous  limitations  on  margins  of  safety,  the  denial  of 
the  right  of  appeal  to  the  Federal  Courts,  regulation  of 
the  details  of  the  business,  further  limitation  upon  the 
discretion  of  Trustees,  and  the  always  present  question  of 
efficient  and  honest  management,  the  future  development 
of  life  insurance  is  by  no  means  promising. 


The  future  of  life  insurance  is  further  menaced  by 
reform  through  destruction.  The  present  peculiar  con- 
ditions in  the  business  world  had  their  beginning  in  life 
insurance.  Other  lines  of  business  are  now  involved. 
How  much  farther  will  the  movement  go  ?  When  will  the 
justice  of  statesmanship,  which  would  reform  by  con- 
servation, take  the  place  of  the  action  of  the  politician, 
who  thinks  he  has  reformed  when  he  has  destroyed? 
Human  experience  teaches  that  it  is  relatively  easy  to 
arouse  human  passions,  but  in  the  retrospect  we  see  that 


The  Future  of  American  Life  Insurance          133 

it  is  a  dangerous  thing  to  do,  even  when  it  seems  to  be  a 
duty.  Wrongs  always  exist  in  society,  in  every  phase  of 
human  society.  Evils  creep  into  the  church,  corrup- 
tion creeps  into  politics,  abuses  creep  into  business.  These 
things  must  be  corrected.  They  always  have  been  cor- 
rected; but  again  in  retrospect  we  sometimes  wonder 
whether  the  correction  was  not  frequently  more  costly 
than  the  crime.  A  dishonest  trustee  should  be  treated  as 
a  criminal.  A  deliberate  looter  of  a  railroad  ought  to  be 
in  the  penitentiary.  The  man  who  makes  a  great  indus- 
trial combination  and  by  means  of  doctored  statements 
unloads  watered  stock  on  a  poorly-informed  public,  put- 
ting the  proceeds  in  his  own  pocket,  is  a  modern  type 
of  highwaymen,  and  ought  to  be  treated  as  such.  But 
when  conditions  like  these  are  shown  to  exist  and  it  is 
shown  with  equal  clearness,  even  in  a  period  of  great  pub- 
lic excitement,  that  they  are  superficial  and  fugitive,  when 
it  appears  that  the  great  body  of  business  to  which  they 
are  related  is  sound,  useful,  and  honestly  conducted,  what 
shall  we  say  of  the  political  leader  who  in  the  name  of 
reform  uses  the  situation  to  fashion  a  cunning  plea  to  all 
the  baser  passions  of  the  human  heart?  What  offence  has 
he  committed  ?  What  shall  we  say  of  the  organ  of  public 
opinion  which  deliberately  misstates  facts,  garbles  testi- 
mony, destroys  reputations,  and  cultivates  suspicion  and 
hate  which  always  lie  near  to  the  surface  of  human  feel- 
ing and  deliberately  brings  on  a  social  tempest,  in  order 
to  sell  its  wares  ?  What  shall  we  say  of  a  great  magazine, 
which,  professing  to  put  before  the  world  a  dispassionate 
review  of  life  insurance  and  life  insurance  companies,  re- 
fuses to  see  responsible  life  insurance  men,  apparently 
from  fear  that  the  truth  in  possession  might  deprive  its 
article  of  certain  sensational  features? 

To-day  the  people  are  in  a  punitive  mood.  Will  they,  as 
they  have  done  many  times  before,  go  on  striking  blindly  ? 


134  Militant  Life  Insurance 

Will  they  overturn  and  overturn,  working  a  destruction 
more  deadly  than  the  evils  at  which  they  rage;  or,  has 
our  citizenship,  with  more  light  and  liberty,  and  more 
self-restraint  and  a  finer  sense  of  responsibility,  reached 
the  point  where  in  spite  of  the  ever-present  politician, 
in  spite  of  the  panders  of  the  press,  reforms  can  be  had 
rationally  and  constructively,  but  yet  effectively? 

Historically  there  are  two  types  of  abuses  in  social, 
economic,  and  political  life.  The  first  represents  real 
moral  decadence,  and  has  generally  been  associated  with 
long  and  unquestioned  exercise  of  irresponsible  power. 
The  second  has  attached  to  periods  of  great  material  prog- 
ress and  development,  periods  when  society  has  been 
relatively  free  from  decadence  in  any  form,  periods  of 
general  optimism,  periods  of  real  achievement.  We  are 
now  at  what  seems  to  be  the  close  of  such  a  period.  We 
have  had  a  prodigious  growth:  great  plans  have  been 
undertaken;  great  things  have  been  done.  Many  things 
have  been  done  hastily,  and  consequently  not  done  well. 
We  had  here  an  opportunity  which  touched  the  imagi- 
nation of  all  men,  and  we  so  improved  the  opportunity 
as  to  push  our  empire  from  the  Atlantic  littoral  to  the 
Pacific  and  beyond  it  in  a  little  over  a  century.  In  every 
phase  of  this  development  there  was  the  ever-present 
opportunity  for  abuses,  excesses,  cruelties,  and  wrongs. 
The  evils  which  exist  in  the  business  of  this  country  to- 
day are  substantially  all  of  this  type.  They  are  the  evils 
which  go  with  accomplishment,  and  not  the  evils  of  de- 
cadence. They  are  evils  which  can  be  remedied  without 
the  hideous  destruction  that  throughout  the  history  of 
the  world  has  characterized  most  periods  of  reforma- 
tion. We  have  started  out  on  a  familiar  road.  Reform 
has  begun  with  the  ancient  accompaniment  of  sickening 
destruction;  but  I  refuse  to  believe  that  it  will  go  on  to 
the  historic  finish.  In  spite  of  the  torch  and  the  red  flag 


The  Future  of  American  Life  Insurance          135 

which  are  in  effect  at  the  head  of  the  first  page  of  every 
yellow  sheet,  there  is  reason  to  believe  that  our  citizenship 
has  a  better  self-control,  a  fairer  valuation  of  the  dema- 
gogue and  the  fanatic,  and,  while  insisting  on  drastic  and 
permanent  changes,  will  finally  bring  those  changes  about 
by  better  processes. 

Just  as  there  have  been  two  types  of  abuses  in  society 
so  there  have  been  two  types  of  reformers.  The  more  nu- 
merous type  has  been  the  reformer  whose  only  weapon  was 
destruction.  But  there  have  been  reformers  who  saved 
and  restored,  and  there  have  been  reformations  which 
were  effective  and  entirely  constructive.  The  destructive 
type  of  reformer  has  occupied  the  larger  place  in  the 
public  mind,  and  still  does  so.  His  appeal  is  immediate 
and  dramatic.  He  touches  something  in  human  nature 
which  quickly  responds.  If  he  has  qualities  of  real  leader- 
ship, he  easily  becomes  a  terror.  There  are  always  enough 
abuses  in  society  to  furnish  material  with  which  to  start 
a  blaze,  and  sometimes  the  material  is  abundant.  On  the 
present  occasion,  this  co-called  reformer  pleads  after  this 
fashion : 

"Business  is  corrupt  through  and  through.  Irretriev- 
able ruin  is  at  hand.  The  only  way  to  save  the  situation 
is  to  strike  and  burn  and  destroy." 

Of  course,  his  are  not  talents  of  a  high  order.  But 
through  politics  and  through  his  appeal  to  the  fears  and 
prejudices  of  men  this  species  of  reformer  frequently 
finds  himself  in  positions  of  great  power,  where  he  usually 
works  great  injury.  It  will  be  interesting  to  cite  a  few 
historical  instances  of  these  two  types  of  reform:  by  de- 
struction and  by  construction. 

After  the  Church  of  England  had  supplanted  the 
Catholic  Church  in  England  injunctions  were  issued 
for  the  general  purification  of  the  churches.  This  is 
Froude's  description  of  what  followed: 


136  Militant  Life  Insurance 

"Spoiliation  became  the  law  of  the  land.  The  statues 
crashed  from  their  niches,  and  rood  and  roodloft  were  laid 
low,  and  the  sunlight  stared  in  white  and  stainless  upon 
the  whitened  aisles.  *  *  *  The  superstition  which  had 
paid  an  overdue  reverence  to  the  symbols  of  holy  things 
was  avenged  by  the  superstition  of  as  blind  a  hatred. " 

Tytler,  in  his  history,  recites  a  specific  instance.  He 
tells  us  how  John  Knox  preached  at  Perth  a  sermon  which 
so  wrought  on  the  minds  of  his  audience  that  it  broke  down 
the  walls  of  St.  Andrew's  Cathedral,  overturned  the 
altars,  destroyed  the  images  and  almost  tore  the  priests  to 
pieces. 

Speaking  of  the  conditions  under  Cromwell,  Macaulay 
says: 

"  Churches  and  sepulchres,  fine  works  of  art,  and  curi- 
ous remains  of  antiquity  were  brutally  defaced.  The  Par- 
liament resolved  that  all  pictures  in  the  royal  collection 
which  contained  representations  of  Jesus  or  of  the  Virgin 
Mother  should  be  burned.  Sculpture  fared  as  ill  as  paint- 
ing. Nymphs  and  Graces,  the  work  of  Ionian  chisels,  were 
delivered  over  to  Puritan  stone-masons  to  be  made 
decent/7 

Fisher,  in  his  history  of  the  Reformation,  in  describing 
the  conditions  in  the  Netherlands,  says : 

"While  the  country  was  thus  agitated,  in  the  Summer 
of  1566,  there  burst  forth  a  storm  of  iconoclasm  that  swept 
over  the  land,  destroying  the  paintings,  images,  and  other 
symbols  and  instruments  of  Catholic  worship,  from  those 
which  adorned  the  great  cathedral  of  Antwerp  to  such  as 
decorated  the  humblest  chapels  and  convents.  In  Flanders 
alone  more  than  four  hundred  churches  were  sacked.  The 
work  of  destruction  was  accomplished  by  mobs  hastily 
gathered,  and  was  one  fruit  of  the  excitement  and  exas- 
peration provoked  by  the  terrible  persecutions. " 

The  most  striking  and  relatively  modern  example  of 


The  Future  of  American  Life  Insurance          137 

reformation  by  destruction  is  what  we  call  the  French 
Revolution.  No  history  of  those  days  which  will  endure 
has  yet  been  written.  The  passions  aroused  were  too  ele- 
mental, and  the  result  which  followed  was  too  far-reach- 
ing. But  whereas  the  opinion  of  the  times,  even  in  the  face 
of  the  atrocities  committed,  to  a  very  considerable  degree 
justified  the  uprising  and  its  acts,  the  opinion  of  the  world 
is  now  decidedly  divided,  and  the  conviction  is  widely  held 
that  liberty  was  really  destroyed  faster  than  it  was  gained. 


If  we  had  no  historical  instances  of  reform  by  con- 
struction, equally  striking  and  equally  important,  we 
might  in  despair  conclude  that  destruction  is  the  only 
method  of  reform  when  certain  types  of  abuses  appear. 
But  the  two  greatest  and  most  salutary  revolutions  in  the 
history  of  England  were  brought  about  without  destruc- 
tion and  without  the  service  of  so-called  reformers. 
One  was  the  revolution  which  in  the  thirteenth 
century  put  an  end  to  the  tyranny  of  nation  over 
nation,  and  the  other  the  revolution  which  a  few 
generations  later  put  an  end  to  the  property  of  man  in 
man.  "  These  revolutions  were  effected  silently  and  im- 
perceptibly ",  says  Macaulay.  "They  struck  contempo- 
rary observers  with  no  surprise,  and  have  received  from 
historians  a  very  scant  measure  of  attention.  They  were 
brought  about  neither  by  legislative  regulation  nor  by 
physical  force.  Moral  causes  noiselessly  effaced  the  dis- 
tinction between  Norman  and  Saxon,  and  then  the  dis- 
tinction between  master  and  slave." 

If  human  slavery  could  be  abolished  in  England  with- 
out the  use  of  force  and  without  waste,  might  not 
John  Knox  have  carried  out  his  ideas  of  reform  in  re- 
ligion and  have  preserved  for  the  edification  and  instruc- 
tion of  the  world  the  splendid  structure  which  was  torn 


138  Militant  Life  Insurance 

into  pieces  in  response  to  the  fury  of  his  appeal?  Was 
the  destruction  wrought  inevitable,  necessary,  or  might 
the  tragedy  of  St.  Andrews  have  been  avoided  if  John 
Knox  had  been  a  statesman?  Could  the  story  of  the 
French  Revolution  have  been  written  differently  if  only 
the  leaders  had  been  wiser?  Might  not  the  unspeakable 
woe  and  loss  of  our  own  Civil  War  have  been  avoided  if 
the  American  people — both  North  and  South — had  been 
imbued  with  the  spirit  of  reasonableness,  of  consideration 
for  the  difficulties  of  the  situation,  and  with  a  determina- 
tion to  solve  their  problems  without  injustice  and  with- 
out violence?  Might  not  the  almost  equally  dreadful 
story  of  the  years  immediately  following  the  Civil  War 
have  been  vastly  different  if  the  doctrinaire  Charles  Sum- 
ner  and  the  practical  politician  Thad  Stevens,  obeying  an 
historic  impulse,  had  not  dominated  the  situation,  by  act- 
ing together  to  give  the  uneducated  black  man  the  right  of 
franchise,  one  following  a  beautiful  theory,  and  the  other 
desiring  to  perpetuate  his  party  in  power?  The  con- 
dition which  brought  together  types  of  men  so  far  re- 
moved as  Sumner  and  Stevens  probably  could  have  been 
handled  by  only  one  man,  and  he  was  slain  by  John 
Wilkes  Booth. 

But  whatever  could  have  happened  or  could  not  have 
happened  in  any  of  the  great  reforms  of  history,  it  is 
certain  that  the  destructive  reformer  is  passing,  and  that 
reform  by  construction  is  coming.  It  will  never  again 
be  possible,  for  example,  for  an  ignorant  and  brutalized 
Turk  to  improve  his  marksmanship  by  using  as 
a  target  the  masterpieces  of  a  Phidias  on  the  frieze 
of  a  Parthenon.  It  will  never  again  be  possible,  outside 
the  arbitraments  of  war,  and  probably  not  even  then,  for 
churches  to  be  sacked,  exquisite  creations  of  art  de- 
stroyed, and  almost  endless  murder  committed  in  the 
name  of  reform.  But  the  reformer  is  still  with  us.  Human 


The  Future  of  American  Life  Insurance          139 

progress  will  still  be  gained  in  much  the  same  way. 
Human  progress  is  still  to  be  gained  only  by  struggle. 
This  country  is  now  in  the  midst  of  a  struggle  that  is  as 
old  as  civilization.  The  problems  are  different,  and  the 
solution  of  the  problems  let  us  hope  will  be  different.  In 
the  present  struggle,  the  first  interest  which  became  in- 
volved was  the  one  which  is  largely  committed  to  the  care 
of  the  men  who  make  up  this  convention.  There  are  not 
lacking  evidences  that  we  have  still  with  us  two  types  of 
reformers,  the  reformer  who  would  destroy  and  the  re- 
former who  would  correct  and  fulfil. 

Putting  aside  any  consideration  of  what  might  have 
been  or  might  not  have  been,  what  an  achievement  for 
statesmanship  it  would  have  been  if  England  had 
been  reformed  without  cutting  off  the  head  of  Charles  I, 
and  then  again  in  a  few  years  restoring  the  monarchy. 
What  an  achievement  in  life  insurance  statesmanship  it 
will  be  if  under  your  wise  and  constructive  supervision 
the  superb  structure  of  American  life  insurance  can  be 
purified  and  preserved  with  all  its  potentialities,  can  be 
conserved  and  developed,  and  its  future  governed  by 
publicity  and  optimism,  not  by  repression  and  volumes 
of  laws  written  full  of  "thou  shalt  not". 

At  the  risk  of  being  classified  with  those  who  would 
ignore-  the  local  rights  of  the  States,  I  emphasize  the  fact 
that  you  cannot  wisely  supervise  life  insurance  unless  you 
ignore  to  a  large  extent  your  own  State  lines  and  assume 
toward  it  an  attitude  which  is  fixed  by  National  considera- 
tions. The  fact  that  you  are  here  and  that  you  assemble 
each  year  to  discuss  the  problems  which  you  must  handle, 
to  discuss  forms  of  reports,  forms  of  statutes  and  rules 
of  practice,  all  show  that  you  already  have  this  point 
of  view.  You  have  found  it  impossible  to  administer 
justly  the  duties  of  your  office  without  regard  to  the 
rights  of  the  policy-holders  in  all  the  States,  and  in  all 


140  Militant  Life  Insurance 

the  countries  of  the  world.  As  officials  you  represent  an 
idea  which  is  the  same  and  an  interest  which  is  the 
same  in  all  lands. 

I  have  considered  briefly  some  dangerous  types  of  legis- 
lation which  you  in  your  high  places  will  have  to  combat. 
I  have  briefly  referred  to  existing  conditions  and  the 
struggle  through  which  all  kinds  of  business  of  importance 
are  now  passing.  I  have  not  asked  you  to  forward  any 
particular  type  of  legislation.  Indeed  life  insurance  has 
seldom  asked  for  legislation  of  any  kind.  But  there  is  a 
condition  existing  to-day  to  which  you  can  with  great 
profit  to  the  general  public  and  to  good  life  insurance 
devote  some  consideration.  The  close  of  1906  showed 
outstanding  on  the  books  of  the  regular  level  premium 
American  life  insurance  companies  nearly  a  billion  dollars 
less  insurance  in  force  than  would  have  been  in  force  if 
the  rate  of  development  and  progress  shown  by  the  com- 
panies at  the  close  of  1904  had  been  maintained  during 
the  succeeding  two  years.  In  making  up  the  gain  and 
loss  of  the  last  two  years  this  tremendous  item 
must  have  attention.  It  consists  of  positive  and  negative 
waste:  positive  waste  in  the  hundreds  of  millions  of 
business  lost,  negative  waste  in  other  hundreds  of  millions 
not  created.  Waste  may  consist  of  things  not  done.  Fear 
is  waste.  Doubt  is  waste.  Spread  a  general  condition  of 
distrust  throughout  business  and  the  results  may  be  as 
deadly  as  those  which  attend  fire,  flood  and  earthquakes. 
A  general  paralysis  of  the  agencies  that  make  for  good 
means  widespread  destruction.  That  condition  to  some 
extent  exists  to-day  in  general  business  and  markedly  so 
in  life  insurance.  I  refer  to  it  not  to  argue  as  to  whether 
the  reforms  had  and  those  coming  balance  the  account, 
but  to  ask  your  aid  against  the  work  of  certain 
companies  and  certain  men  who  are  waxing  fat  on  this 


The  Future  of  American  Life  Insurance          141 

condition.  These  companies  and  this  type  of  soliciting 
agent  are  of  kin  to  those  eminently  respectable  ladies 
and  gentlemen  who  looted  the  Imperial  Palace  in  Pekin 
during  the  recent  invasion  of  China  by  the  Allied  Armies. 
They  are  busy  now  looting,  taking  advantage  of  the  public 
temper  to  raid  and  destroy.  The  "Twister",  whether  he 
carries  a  rate-book  and  glories  in  his  shame  or  governs 
a  company  and  quibbles  when  protest  is  made,  is  an 
enemy  of  society,  and  legislation  against  him  may  well 
demand  your  attention. 

Another  danger — a  present  and  serious  danger — has 
only  lately  begun  to  assert  itself,  and  is  the  natural  out- 
growth of  the  remarkable  success  of  companies  conducted 
on  the  mutual  plan.  The  great  accumulations  of  money 
which  are  necessary  to  solvency,  which  the  States  demand, 
and  which  you  must  insist  on,  require  that  Trustees  shall 
be  vigilant,  efficient,  and  honest,  but,  in  theory  at  least, 
the  control  of  hundreds  of  millions  carries  with  it  great 
power.  This  presents  an  opportunity  for  high  public  use- 
fulness, and  it  also  presents  opportunities  of  a  different 
sort, — opportunities  to  men  who  have  no  interest  in  life 
insurance,  who  are  not  appealed  to  by  its  beneficence,  who 
care  nothing  whatever  for  its  service  to  the  State,  who 
look  covetously  upon  it  because  of  its  accumulation  of 
money.  If  "patriotism  is  the  last  refuge  of  a  scoundrel", 
may  not  reform  in  life  insurance  be  the  opportunity 
for  the  conscienceless  manipulator?  The  assets  of 
two  mutual  companies  alone  amount  to  over  one 
billion  dollars  to-day.  The  control  of  these  com- 
panies is  decided  by  the  franchise  of  their  con- 
stituent members.  What  an  opportunity  for  the  dema- 
gogue! What  a  field  for  the  insurance  politician!  I  am 
well  within  the  facts  which  have  come  under  your  own 
observation  when  I  say  that  the  insurance  politician  has 
begun  to  make  himself  heard.  In  the  name  of  reform, 


142  Militant  Life  Insurance 

taking  advantage  of  public  passion,  of  serious  mistakes, 
and  of  probable  crimes,  he  has  already  made  a  definite 
and  powerful  effort  to  get  control.  He  doubtless  has  not 
made  his  last  effort.  He  will  never  succeed  against  the 
judgment  of  the  men  who  make  up  the  membership  of 
this  Convention.  I  am  inclined  to  think  that  here  lies 
your  supreme  responsibility  in  the  immediate  future. 

It  may  be  your  clear  duty  at  some  time  to  use  all 
the  power  you  have  as  representatives  of  the  various 
States  of  the  Union  to  help  cast  out  dishonest  administra- 
tions of  mutual  companies.  If  that  situation  should  arise, 
you  will  perform  your  duty  and  perform  it  fearlessly. 
But  it  will  always  be  your  duty, — not  now  and  then  but 
always, — to  exercise  a  wise  discrimination,  to  see  that 
reform  is  not  done  by  violence,  to  see  that  in  turning  out 
unworthy  men  you  do  not  invite  in  others  infinitely  worse. 
The  danger  that  mutual  insurance  will  fall  into  the  hands 
of  politicians  is  a  very  real  one.  If  I  did  not  believe  that 
the  Insurance  Commissioners  of  the  States  of  the  Union 
were  alive  to  this  situation,  and  that  they  will  stand  like 
flint  against  the  schemes  of  the  politician  and  the  manipu- 
lator, I  should  not  be  able  to  cast  a  cheerful  horoscope 
to-day.  But  you  know,  and  I  know,  that  bad  as  some  of 
the  conditions  have  been,  the  great  body  of  life  insurance 
is  sound  and  honest.  Do  I  overstate  the  truth  if  I  claim 
that  98%  of  the  men  responsible  for  the  growth  of  mutual 
life  insurance  are  worthy  of  your  confidence,  and  that 
even  at  its  worst  not  more  than  2%  have  deserved  your 
reprobation  and  condemnation?  If  that  be  true  under 
conditions  which  were  developed  in  the  recent  life  insur- 
ance upheaval,  it  will  continue  true  for  a  long  period  of 
time.  And  I  take  it  that  it  is  fully  as  much  your  duty  to 
your  State  and  the  policy-holders  in  your  State  to  support 
and  aid  the  honest  men  who  have  devoted  their  lives  to 
the  construction  of  our  great  companies  as  it  is  to  con- 


The  Future  of  American  Life  Insurance          143 

demn  those  who  have  been  unfaithful.  This  I  believe  you 
will  do.  And  so  my  horoscope  must  be  an  optimistic  one. 
There  are  dangers  ahead,  grave  dangers:  in  the  local 
as  against  the  national  view;  in  taxation;  in  further  and 
in  existing  limitations  on  funds  held  for  contingencies 
and  safety;  in  added  paternalistic  enactments;  in  further 
attempts  by  the  State  to  regulate  the  details  of  business 
by  statute;  in  the  natural  desire  to  control  the  funds 
which  life  insurance  must  have;  in  inefficient  and  dis- 
honest administration.  But  as  against  all  this  there 
is  the  appeal  which  life  insurance  makes  to  ,the 
best  in  human  affection  and  in  society.  There  is 
the  safeguard  of  publicity,  and  there  is  the  strong 
probability  that  we  have  at  last  achieved  a  citizenship 
which  can  reform  by  destroying  only  that  which  ought 
to  be  destroyed.  Given  the  supervision  of  a  body  of  men 
like  this,  with  administration  which  lives  and  moves  in 
the  sunlight,  and  we  shall  not  long  hear  or  heed  the 
voice  of  the  man  who  cries  out  against  life  insurance 
because  it  has  been  too  successful.  We  shall  not  listen 
long  to  the  man  who  says  the  companies  are  too  big. 
In  retrospect  how  splendid  now  seems  the  courage  of 
Robert  Livingston  and  James  Monroe,  who  bought  from 
the  great  Napoleon  without  any  authority  whatever  the 
territory  then  known  as  Louisiana,  out  of  which  has  since 
been  erected  that  magnificent  series  of  commonwealths 
lying  along  and  to  the  west  of  the  Mississippi.  Yet  against 
them  and  what  they  did  the  same  voice  was  raised  and 
the  same  fear  was  invoked.  Josiah  Quincy  even  went 
so  far  as  to  say  that  the  bonds  between  the  States 
had  been  severed  by  that  purchase.  People  were  told 
that  the  country  was  becoming  too  large;  that  so  vast 
a  territory  could  not  be  handled  under  our  form  of  gov- 
ernment ;  that  the  original  Thirteen  States  would  be  over- 
whelmed. Yet  with  the  exception  of  one  or  two  men, 


144  Militant  Life  Insurance 

who  are  remembered  for  other  things,  those  who  raised 
the  cry  are  forgotten,  and  the  country  has  swept  on 
to  the  fulfilment  of  its  destiny.  So  in  my  judgment 
will  be  buried  the  names  and  the  memories  of  the 
men  who  have  gone  up  and  down  the  land  during  the 
last  two  years  crying  out  against  the  development  of 
American  life  insurance. 

Let  those  who  will  rejoice  in  destruction.  We  are  op- 
timists. We  believe  in  our  country,  in  its  institutions,  in 
its  future.  We  do  not  fear  wealth;  we  welcome  all  the 
forces  that  produce  it  and  conserve  it.  We  would  purify 
corporate  life,  not  throttle  it;  moralize  wealth,  not  prevent 
it.  We  will  so  far  as  we  wisely  can  pluck  the  tares  from 
the  growing  wheat,  but  we  remember,  too,  that  in  some 
cases  and  to  some  extent  we  must  heed  the  admonition  of 
the  Great  Teacher  who  said — "Nay;  lest  while  ye  gather 
up  the  tares,  ye  root  up  also  the  wheat  with  them." 

The  future  of  American  life  insurance  is  as  certain  as 
the  future  of  American  civilization.  If  it  fails,  civilization 
will  fail.  But  it  will  not  fail.  It  lies  too  close  to  the 
hearts  and  homes  of  the  people.  It  is  too  firmly  and  too 
scientifically  established.  It  must  go  on  because  conjugal 
and  parental  affection  will  go  on.  It  is  as  truly  a  part  of 
this  age  as  cathedral  building  was  of  an  earlier  age.  It  fits 
into  the  plans  of  a  busy  world,  and  this  is  a  very  busy 
world.  Life  is  more  productive,  more  generous,  more 
effective,  sweeter,  happier;  values  are  more  certain;  se- 
curities more  abundant  and  better  than  ever  before.  All 
of  these  things  make  life  insurance  as  inevitable  as  organic 
life  under  the  conditions  which  exist  on  this  planet. 
American  life  insurance,  with  all  its  faults,  has  seen  the 
opportunity  and  the  need  and  has  splendidly  answered 
both.  Therefore,  it  must  go  on:  business  demands  it; 
good  morality  demands  it;  the  individual  demands  it; 
the  State  demands  it;  civilization  demands  it. 


The  Future  of  American  Life  Insurance          145 


MEMORANDUM  A. 

MARKET  RATE  OF  THE  FOLLOWING  SECURITIES  JULY  1,  1905, 
AS  COMPARED  WITH  JULY  1,  1907. 


July  1,  1905. 
British  Consols,   2%s  ..................   86%  &  int. 

Mass.  State  3s,  1915-1939  ..............  95%  " 

N.  Y.  City  3%s,  1954  ...................  100%  " 

Atch.,  Top.  &  S.  F.  Gen'l  4s,  1995  ......  102%  " 

B.  &  O.  1st  4s,  1948  ....................  104  " 

C.,  B.  &  Q.,  Ills.  Div.,  3%s,  1949  .......   95%  " 

Chic.  &  No.  West'n  Debs.  5s,  1921  .....  Ill  " 

Chic.,  St.  P.,  Minn.  &  O.  Cons.  6s,  1930.136%  " 

Ills.  Central,  St.  Louis  Div.    3%s,  1951.   92%  " 

Ills.  Central,  Louisville  Div.*,  3%s,  1953.   94%  " 

Lake  Shore  &  Mich.  So.  1st  3%s,  1997.   99%  " 

Louis.  &  Nash.  Unified  4s,  1940  ........  103%  " 

Mich.  Cent.  3%s,  1952  .................   96%  " 

Nash.,  Chat.  &  St.  L.  7s,  1913  .........  119%  " 

N.  Y.  C.  &  H.  R.  4s,  1934  ..............  100%  " 

N.  Y.  &  Harlem  3%s  2000  ..............  101  " 

Norfolk  &  W.,  1st  Cons.,  4s,  1996  ......  101%  " 

Penn.  R.  R.  Convertible  3%s,  1915  .....  100%  " 

Pitts.,  Cin.,Chic.&St.L.,Ser.A,4%s,1940.  111%  " 

St.Louis  &  San  Francisco  Gen'l  6s,1931.  127y8  " 

St.  P.,  Minn.  &  Man.  1st  Cons.  6s,  1933.135  " 

Southern  Ry.  1st  Cons.  5s,  1994  ........  118%  " 

Union  Pacific  4s,  1947  ..................  105%  " 

Lake  Sh.  &  Mich.  So.  Ry.  Debs.,4s,1928.   99%  " 

No.  Pac.,  Gt.No.,  C..B.&  Q.  Coll.  4s,  1921.101  " 


Loss 

July  1, 

1907.    Points 

81% 

&  int.        5 

90% 

4% 

89% 

11% 

97 

5% 

97% 

6% 

87% 

8% 

103 

8 

125% 

10% 

87% 

5% 

87% 

7 

91% 

8% 

97 

6% 

90% 

6% 

113% 

5% 

91% 

9 

96% 

4% 

92% 

8% 

89 

11% 

106% 

5% 

117% 

9% 

127 

8 

105% 

13 

99 

6% 

91% 

8% 

92% 

8% 

MEMORANDUM  B. 


TAXES  PAID  BY  THE  NEW- YORK  LIFE  INSURANCE 
COMPANY  IN  1906. 

ALABAMA.— Total  taxes,  $6,976.18,  made  up  as  follows:  On  Premiums 
@  1%  gross,  $5,771.50;  State  Fees,  $139.50;  Agents'  Licenses— State, 
$185.50,  Local,  $847.75;  City  premium-tax,  $22.97;  Personal  property 
tax,  $8.96.  Total  premiums  collected  in  1905,  $577,150.  Per  cent, 
of  taxes  to  premiums,  1.21. 

ALASKA.— Total  taxes,  $62.60,  made  up  as  follows:  Fees,  10c.; 
Agents'  Licenses,  $62.50.  Total  premiums,  $74,729.  Per  cent,  of 
taxes  to  premiums,  0.08. 


146  Militant  Life  Insurance 

ARIZONA. — Total  taxes,  $4,962.71,  made  up  as  follows:  On  Premiums 
@  2%  gross,  $4,822.74;  State  License,  $5;  State  Fees,  $7.50;  Per- 
sonal property  tax,  $15.47;  Agents'  Licenses— Territorial,  $62,  Local, 
$50.  Total  premiums,  $241,137.  Per  cent,  of  taxes  to  premiums, 
2.06. 

ARKANSAS. — Total  taxes,  $7,132.80,  made  up  as  follows:  On  Pre- 
miums, less  losses,  endowments  and  commissions  @  2%%,  $6,890.45; 
State  License,  $2;  State  Fees,  $55;  Agents'  Licenses— State,  $182; 
Personal  property  tax,  $3.35.  Total  premiums,  $444,016.  Per  cent, 
of  taxes  to  premiums,  1.61. 

CALIFORNIA.— Total  taxes,  $20,842.53,  made  up  as  follows:  On  Pre- 
miums @  1%  gross,  $19,968.31;  State  License,  $20;  State  Fees, 
$104.75;  Personal  property  tax,  $311.47;  Agents'  Licenses — State, 
$131,  Local,  $307.  Total  premiums,  $1,996,831.  Per  cent,  of  taxes 
to  premiums,  1.04. 

COLORADO.— Total  taxes,  $15,301.92,  made  up  as  follows:  On  Pre- 
miums @  2%  gross,  $14,271.44;  State  License,  $5;  Corporation 
License,  on  premiums  @  1/10%  gross,  $713.57;  State  Fees,  $69.05; 
Personal  property  tax,  $78.86;  Agents'  Licenses— State,  $164.  Total 
premiums,  $713,572.  Per  cent,  of  taxes  to  premiums,  2.14. 

CONNECTICUT.— Total  taxes,  $6,181.26,  made  up  as  follows:  On 
Premiums  @  1%  gross,  $6,137.26;  State  License,  $10;  State  Fees, 
$34.  Total  premiums,  $613,726.  Per  cent,  of  taxes  to  premiums,  1. 

DELAWARE.— Total  taxes,  $1,187.35,  made  up  as  follows:  On  Pre- 
miums @  1%%  gross,  $1,013.35;  State  License,  $27;  State  Fees, 
$17;  Agents'  Licenses— State,  $130.  Total  premiums,  $67,557.  Per 
cent,  of  taxes  to  premiums,  1.76. 

DISTRICT  OF  COLUMBIA.— Total  taxes,  $5,118.58,  made  up  as  fol- 
lows: On  Premiums,  less  dividends,  @  1%%,  $4,943.41;  District 
licenses,  $60;  District  fees,  $21;  Agents'  licenses,  $94.17.  Total 
Premiums,  $342,085.  Per  cent,  of  taxes  to  premiums,  1.50. 

FLORIDA. — Total  taxes,  $10,856.59,  made  up  as  follows:  On  Pre- 
miums @  2%  gross,  $10,034.84;  State  and  county  licenses,  $235.25; 
State  fees,  $13.75;  Agents'  licenses— State,  $260,  local,  $315.50. 
Total  premiums,  $501,742.  Per  cent,  of  taxes  to  premiums,  2.16. 

GEORGIA. — Total  taxes,  $11,480.38,  made  up  as  follows:  On  Pre- 
miums @  1%  gross,  $8,048.77;  State  license,  $1;  State  fees,  $83.20; 
Personal  property  tax,  $26.13;  Agents'  licenses — State,  $1,066,  local, 
$600;  City  and  county  taxes,  $1,668.28.  Total  Premiums,  $804,877. 
Per  cent,  of  taxes  to  premiums,  1.43. 

IDAHO. — Total  taxes,  $4,427.93,  made  up  as  follows:  On  Premiums, 
less  death-losses  @  2%,  $4,173.68;  State  license,  $50;  State  fees, 
$29.25;  Agents'  licenses,  $175.  Total  Premiums,  $254,849.  Per  cent, 
of  taxes  to  premiums,  1.74. 

ILLINOIS. — Total  taxes,  $61,808.23,  made  up  as  follows:  On  Premiums 
@  1%  gross,  $59,797.91;  State  fees,  $193.75;  Personal  property  tax, 
$782.57;  Agents'  licenses— State,  $1,034.  Total  Premiums,  $5,979,791. 
Per  cent  of  taxes  to  premiums  1.03. 


The  Future  of  American  Life  Insurance          147 

INDIANA.— Total  taxes,  $27,344.52,  made  up  as  follows:  On  Pre- 
miums less  death-losses,  @  3%,  $26,863.35;  State  license,  $5;  State 
fees,  $78.50;  Personal  property  tax,  $32.67;  Agents'  licenses — State, 
$365.  Total  Premiums,  $1,182,638.  Per  cent,  of  taxes  to  premiums, 
2.31. 

IOWA. — Total  taxes,  $26,203.09,  made  up  as  follows:  On  Premiums 
©  2%%  gross,  $25,923.89;  State  license,  $2;  State  fees,  $20;  Per- 
sonal property  tax,  $29.20;  Agents'  licenses,  $228.  Total  Premiums, 
$1,036,956.  Per  cent,  of  taxes  to  premiums,  2.53. 

KANSAS.— Total  taxes,  $14,420.90,  made  up  as  follows.  On  Premiums 
€>  2%  gross,  $13,956.16;  State  fees,  $102.50;  Personal  property  tax, 
$2.99;  Agents'  licenses— State,  $208,  local,  $151.25.  Total  Premiums, 
$697,808.  Per  cent,  of  taxes  to  premiums,  2.07. 

KENTUCKY.— Total  taxes,  $20,228.47,  made  up  as  follows:  On  Pre- 
miums @  2%  gross,  $18,146.13;  State  license,  $1;  State  fees,  $43.30; 
Personal  property  tax,  $123.27;  Agents'  licenses— State,  $455,  local, 
$581.50;  city  and  county  taxes,  $878.27.  Total  Premiums,  $907,306. 
Per  cent,  of  taxes  to  premiums,  2.23. 

LOUISIANA.— Total  taxes,  $11,183.25,  made  up  as  follows:  State  li- 
cense, $5,260;  State  fees,  $29.25;  Personal  property  tax,  $20; 
Agents'  licenses— State,  $244,  local,  $5,630.  Total  Premiums, 
$1,241,300.  Per  cent,  of  taxes  to  premiums,  0.90. 

MAINE. — Total  taxes  and  fees,  $4,821.50,  made  up  as  follows.  On  Pre- 
miums @  !*&%  gross,  $4,709.50;  State  license,  $20;  State  fees,  $6; 
Agents'  licenses — State,  $86.  Total  Premiums,  $313,967.  Per  cent, 
of  taxes  to  premiums,  1.54. 

MARYLAND.— Total  taxes,  $11,403.16,  made  up  as  follows:  On  Pre- 
miums @  1%%  gross,  $10,691.85;  State  license,  $200;  State  fees, 
$219.13;  Personal  property  tax,  $42.18;  Agents'  licenses— State,  $150. 
Total  premiums,  $712,790.  Per  cent,  of  taxes  to  premiums,  1.60. 

MASSACHUSETTS.— Total  taxes,  $33,732.59,  made  up  as  follows:  On 
reserve  @  *4%,  $32,856.24;  State  fees,  $36;  Personal  property  tax, 
$28.35;  Agents'  licenses— State,  $812.  Total  Premiums,  $2,764,918. 
Per  cent,  of  taxes  to  premiums,  1.22. 

MICHIGAN.— Total  taxes,  $25,472.27,  made  up  as  follows:  On  Pre- 
miums @  2%  gross,  $25,445.20;  State  fees,  $14.50;  Personal  property 
tax,  $12.57.  Total  Premiums,  $1,272,260.  Per  cent,  of  taxes  to  pre- 
miums, 2. 

MINNESOTA.— Total  taxes,  $18,446.64,  made  up  as  follows:  On  Pre- 
miums <g>  2%  gross,  $18,105.65;  State  license,  $2;  State  fees,  $138.41; 
Personal  property  tax,  $6.58;  Agents'  licenses — State,  $194.  Total 
Premiums,  $905,283.  Per  cent,  of  taxes  to  premiums,  2.04. 

MISSISSIPPI.— Total  taxes,  $3,829.97,  made  up  as  follows:  On  Pre- 
miums <g>  2%  gross  on  first  year's  premiums,  0.1%  gross  on  re- 
newals, $2,520.81;  State  license,  $250;  State  fees,  $29.50;  Agents' 
licenses— State,  $158,  local,  $871.66.  Total  Premiums,  $439,450.  Per 
cent,  of  taxes  to  premiums,  0.87. 


148  Militant  Life  Insurance 

MISSOURI.— Total  taxes,  $50,121.57,  made  up  as  follows:  On  Pre- 
miums @  2%  gross,  $48,877.99;  State  license,  $5;  State  fees,  $86.06; 
Personal  property  tax,  $187.02;  Agents'  licenses — State,  $556,  local, 
$409.50.  Total  Premiums,  $2,443,900.  Per  cent,  of  taxes  to  pre- 
miums, 2.05. 

MONTANA.— Total  taxes,  $12,855.77,  made  up  as  follows:  On  Pre- 
miums <§>  2%%  gross  on  first  $5,000  and  2%  on  excess,  $7,400.65; 
State  fees,  $43;  Agents'  licenses— State,  $140,  local,  $30;  city  and 
county  taxes  on  Premiums  less  death-losses  and  endowments, 
$5,242.12.  Total  premiums,  $370,000.  Per  cent,  of  taxes  to  pre- 
miums, 3.47. 

NEBRASKA. — Total  taxes,  $9,557.89,  made  up  as  follows:  On  Pre- 
miums <§>  2%  gross,  $9,322.66;  State  license,  $2;  State  fees,  $27; 
Personal  property  tax,  $60.23;  Agents'  licenses — State,  $146.  Total 
Premiums,  $466,133.  Per  cent,  of  taxes  to  premiums,  2.05. 

NEVADA. — Total  taxes,  $145.25,  made  up  as  follows:  State  license, 
$100.25;  State  fees,  $20;  Agents'  licenses— local,  $25.  Total  Pre- 
miums, $138,792.  Per  cent,  of  taxes  to  premiums,  0.11. 

NEW  HAMPSHIRE.— Total  taxes  and  fees,  $2,133.91,  made  up  as  fol- 
lows: On  Premiums  @  1%  gross,  $1,982.41;  State  licenses,  $5; 
State  fees,  $24.50;  Agents'  licenses— State,  $122.  Total  Premiums, 
$198,241.  Per  cent,  of  taxes  to  premiums,  1.08. 

NEW  JERSEY.— Total  taxes,  $10,544.82,  made  up  as  follows:  On  Pre- 
miums @  \%  gross,  $10,242.81;  State  fees,  $26.75;  Personal  property 
tax,  $39.26;  Agents'  licenses— State,  $236.  Total  Premiums,  $1,024,- 
281.  Per  cent,  of  taxes  to  premiums,  1.03. 

NEW  MEXICO.— Total  taxes,  $3,175.77,  made  up  as  follows:  On  Pre- 
miums @  2%  gross,  $3,064.27;  State  license,  $2;  State  fees,  $72.50; 
Agents'  licenses— State,  $26,  local,  $11.  Total  Premiums,  $153,214. 
Per  cent,  of  taxes  to  premiums,  2.07. 

NEW  YORK.— Total  taxes,  $126,736.49,  made  up  as  follows:  On  Pre- 
miums @  1%  gross,  $124,428.39;  State  fees,  $1,331.60;  Agents'  li- 
censes— State,  $976.50.  Total  Premiums,  $12,442,839.  Per  cent,  of 
taxes  to  premiums,  1.02. 

NORTH  CAROLINA.— Total  taxes,  $9,263.67,  made  up  as  follows:  On 
Premiums  @  2%%  gross,  $8,890.42;  State  license,  $250;  State  fees, 
$39.25;  Agents'  licenses— State,  $84.  Total  Premiums,  $355,617.  Per 
cent,  of  taxes  to  premiums,  2.6. 

NORTH  DAKOTA.— Total  taxes,  $10,269.61,  made  up  as  follows:  On 
Premiums  @  2%%  gross,  $9,815.98;  State  license,  $2;  State  fees, 
$348;  Personal  property  tax,  $51.63;  Agents'  licenses— State,  $52. 
Total  Premiums,  $392,639.  Per  cent,  of  taxes  to  premiums,  2.62. 

OHIO. — Total  taxes,  $61,859.36,  made  up  as  follows:  On  Premiums  @ 
2%%  gross,  $60,884.21;  State  license,  $2;  State  fees,  $313.96;  Per- 
sonal property  tax,  $201.19;  Agents'  licenses— State,  $458.  Total 
Premiums,  $2,435,368.  Per  cent,  of  taxes  to  premiums,  2.54. 


The  Future  of  American  Life  Insurance          149 

OKLAHOMA  AND  INDIAN  TERRITORY.— Total  taxes,  $216.43,  made 
up  as  follows:  State  license,  $26;  State  fees,  $61;  Personal  prop- 
erty tax,  $10.88;  Agents'  licenses— State,  $90,  local,  $12.50;  city  and 
county  taxes,  $17.05.  Total  Premiums,  $483,007.  Per  cent,  of  taxes 
to  premiums,  0.04. 

OREGON. — Total  taxes,  $3,662.26,  made  up  as  follows:  On  Premiums 
less  Policy-claims  @  2%,  $3,447.76;  State  license,  $100;  State  fees, 
$14.50;  Agents'  licenses— State,  $100.  Total  Premiums,  $277,699. 
Per  cent,  of  taxes  to  premiums,  1.32. 

PENNSYLVANIA.— Total  taxes,  $94,376.32,  made  up  as  follows:  On 
Premiums  @  2%  gross,  $93,209.52;  State  license,  $2;  State  fees, 
$91.80;  Agents'  licenses— State,  $1,002,  local,  $71.  Total  Premiums, 
$4,660,476.  Per  cent,  of  taxes  to  premiums,  2.03. 

RHODE  ISLAND.— Total  taxes,  $6,057,  made  up  as  follows:  On  Pre- 
miums @  2%  gross,  $5,938;  State  fees,  $53;  Agents'  licenses— State, 
$66.  Total  Premiums,  $296,900.  Per  cent,  of  taxes  to  premiums, 
2.04. 

SOUTH  CAROLINA.— Total  taxes,  $10,925.62,  made  up  as  follows:  On 
Premiums  <g>  1%%  gross,  $2,396.69;  State  license,  $100;  State  fees, 
$3.50;  Personal  property  tax,  $7.26;  Agents'  licenses — local,  $1,031.34; 
city  and  county  tax  on  Premiums,  $7,386.83.  Total  Premiums, 
$479,338.  Per  cent,  of  taxes  to  premiums,  2.28. 

SOUTH  DAKOTA.— Total  taxes,  $5,848.41,  made  up  as  follows:  On 
Premiums,  @  2%%  gross,  $5,575.14;  State  license,  $2;  State  fees, 
$164;  Personal  property  tax,  $11.27;  Agents'  licenses — State,  $96. 
Total  Premiums,  $223,005.  Per  cent,  of  taxes  to  premiums,  2.62. 

TENNESSEE.— Total  taxes,  $16,458.41,  made  up  as  follows:  On  Pre- 
miums less  dividends  reducing  premiums,  <g>  2%%,  $15,916.41;  State 
Fees,  $38.50;  Agents'  licenses— State,  $503.50.  Total  Premiums, 
$639,608.  Per  cent,  of  taxes  to  premiums,  2.57. 

TEXAS. — Total  taxes,  $51,094.18,  made  up  as  follows:  On  Premiums 
@  2%%  gross,  $50,105.70;  State  fees,  $60.15;  Personal  property  tax, 
$259.83;  Agents'  licenses— State,  $75,  local,  $518.50.  Total  Pre- 
miums, $2,226,920.  Per  cent,  of  taxes  to  premiums,  2.29. 

UTAH. — Total  taxes,  $6,039.16,  made  up  as  follows:  On  Premiums  @ 
1%%  gross,  $5,776.97;  State  license,  $5;  State  fees,  $87.50;  Personal 
property  tax,  $15.69;  Agents'  licenses— State,  $129,  local,  $25.  Total 
Premiums,  $385,131.  Per  cent,  of  taxes  to  premiums,  1.57. 

VERMONT. — Total  taxes,  $5,932.64,  made  up  as  follows.  On  Premiums 
less  dividends,  @  2%,  $5,747.39;  State  license,  $5;  corporation  tax, 
$50;  State  fees,  $22.25;  Agents'  licenses— State,  $108.  Total  Pre- 
miums, $311,461.  Per  cent,  of  taxes  to  premiums,  1.9. 

VIRGINIA. — Total  taxes,  $9,297.40,  made  up  as  follows:  On  Premiums 
@  1%  gross  and  corporation  tax  @  0.1%  gross,  $6,829.74;  State 
license,  $200;  State  fees,  $114.60;  Personal  property  tax,  $9.96; 
Agents'  licenses— local,  $1,271.75;  city  and  county  taxes,  $128.85. 
Total  Premiums,  $620,965.  Per  cent,  of  taxes  to  premiums,  1.5. 


150  Militant  Life  Insurance 

WASHINGTON.— Total  taxes,  $12,634.56,  made  up  as  follows:  On  Pre- 
miums less  death- losses,  @  2%,  $12,264.09;  State  license,  $10;  State 
fees,  $80;  Personal  property  tax,  $28.47;  Agents'  licenses — State, 
$252.  Total  Premiums,  $770,271.  Per  cent,  of  taxes  to  premiums, 
1.64. 

WEST  VIRGINIA.— Total  taxes,  $3,192.63,  made  up  as  follows:  On 
new  Policies  @  $1.50  per  $1,000,  $2,822.13;  State  license,  $5;  State 
fees,  $30.50;  Agents'  licenses — State,  $335.  Total  Premiums, 
$381,416.  Per  cent,  of  taxes  to  premiums,  0.84. 

WISCONSIN.— Total  taxes,  $12,105.70,  made  up  as  follows:  On  Pre- 
miums @  1%  gross,  $11,914.70;  State  fees,  $25;  Agents'  licenses- 
State,  $166.  Total  Premiums,  $1,191,470.  Per  cent,  of  taxes  to  pre- 
miums, 1.02. 

WYOMING.— Total  taxes,  $4,249.15,  made  up  as  follows:  On  Premiums 
@  2*6%  gross,  $4,205.15;  State  license,  $25;  State  fees,  $4;  Agents- 
licenses — State,  $15.  Total  Premiums,  $168,206.  Per  cent,  of  taxes 
to  premiums,  2.53. 


INSURANCE : 

WHAT  SHOULD  BE  THE  ATTITUDE  TOWARD  IT  OP  THE 
STATE  OF  OKLAHOMA? 


AN   ADDRESS  BEFORE   THE    18TH  SESSION    OF  THB  TRANS  -  MISSISSIPPI    COMMERCIAL 
CONGRESS,  AT  MUSKOGEE,  OKLAHOMA,  NOTEMBER  20,  1907 


>HE  union  of  a  man  and  a  woman  in  mar- 
riage— which  adds  another  family  to  the 
State— and  the  birth  of  a  child— which 
adds  another  member  to  the  family— are 
events  which  have  perpetual  and  roman- 
tic interest.  Whether  we  consider  the 
entrance  of  Oklahoma  into  the  sisterhood 
of  States  as  the  setting  up  of  an  indepen- 
dent household  by  a  newly-married  couple 
or  as  the  birth  of  a  child  into  the  family  of  Uncle  Sam,  it 
is  an  event  that  calls  for  good  wishes  and  sincere  congratu- 
lations on  the  part  of  the  other  households  and  other  mem- 
bers of  the  family.  It  reminds  us  too  how  intimately  the 
admission  of  new  States  has  been  connected  with  great 
events  in  the  history  of  the  Republic. 

The  first  State  to  be  added  to  the  Original  Thirteen 
was  my  own  native  State— Vermont— which  had  been  an 
independent  republic  for  fourteen  years  previously.  Her 


151 


152  Militant  Life  Insurance 

admission  to  the  Union  in  1791  settled  a  quarrel  between 
New  York  and  the  inhabitants  of  the  New  Hampshire 
Grants  which  antedated  the  Revolution,  which  had  caused 
frequent  collisions  between  the  authorities  of  the  two  sec- 
tions and  had  on  one  occasion  led  to  actual  bloodshed.  The 
admission  of  Kentucky  settled  the  question  of  the  relation 
of  Virginia  to  the  vast  hinterland  which  she  almost  single- 
handed  had  rescued  from  the  control  of  the  Indians  and  of 
the  British  Government,  and  out  of  which  so  many  common- 
wealths have  since  been  constituted.  She  gave  up  to  Con- 
gress her  claim  to  the  territory  northwest  of  the  Ohio  in 
1784,  and  the  next  year  she  authorized  the  inhabitants  of 
what  is  now  Kentucky  to  consider  the  formation  of  an 
independent  government.  This  led  to  the  admission  of 
Kentucky  to  the  Union  in  1792.  The  admission  of  Ten- 
nessee settled  for  North  Carolina  a  similar  controversy, 
which  had  already  led  to  a  rebellion  and  the  organization 
of  the  State  of  Franklin.  This  State  maintained  a  pre- 
carious existence  for  four  years,  and  her  Governor,  General 
John  Sevier,  after  being  tried  for  treason,  became  the  first 
Governor  of  Tennessee.  The  admission  of  Missouri  marked 
the  first  great  debate  upon  the  extension  of  slavery,  and  the 
compromise  under  which  it  became  a  member  of  the  Union 
postponed  as  well  as  foreshadowed  the  armed  conflict  over 
the  same  question  forty  years  later.  The  admission  of 
Texas  brought  on  the  Mexican  War,  and  added  California, 
Nevada,  Utah,  and  all  of  Colorado  lying  west  of  the  Rocky 
Mountains,  to  the  national  domain.  The  discussion  con- 
cerning the  admission  of  Kansas  and  Nebraska  revived  the 
anti-slavery  controversy  and  led  to  the  Civil  War.  The 
admission  of  Oklahoma  marks  another  era  in  our  national 
history,— little  thought  of  because  not  attended  with  clamor 
and  bloodshed,— namely,  the  final  act  in  the  settlement  of 
the  relation  between  the  original  inhabitants  of  this  country 
and  those  who  have  settled  it  and  subdued  it.  In  Oklahoma 


Insurance:   In  Oklahoma  153 

the  tribal  organization  of  the  Indians  who  were  domiciled 
here  has  been  finally  broken  up  and  the  Indian  is  at  last  a 
man  and  a  citizen. 

The  transformation  of  a  Territory  into  a  State  and  the 
solution  of  the  problems  by  which  that  transformation  has 
generally  been  marked  have  not  added  directly  to  the  wealth 
or  prosperity  of  the  people.  These  events  have  created 
conditions  under  which  the  forces  and  agencies  which  make 
for  good  could  operate  to  advantage.  The  people  of  Ver- 
mont, of  Kentucky,  of  Tennessee,  of  Missouri,  of  Texas, 
of  Kansas  and  Nebraska,  were  benefited  by  their  admission 
to  the  Union,  and  the  Union  was  made  stronger  by  their 
admission,  because  certain  perplexing  questions  were 
thereby  settled,  certain  obstacles  to  the  maintenance  of 
order,  to  the  administration  of  justice  and  to  the  free  play 
of  industrial  and  moral  forces  were  removed.  The  admis- 
sion of  Oklahoma  has  not  increased  her  natural  resources, 
nor  added  a  man  to  her  population  or  a  dollar  to  her  capi- 
tal,—but  it  has  removed  certain  obstacles  to  the  develop- 
ment of  her  resources,  and  as  a  result  will  enable  her  people 
to  employ  their  energies  and  their  capital  to  better  advan- 
tage. You  are  now  free  to  do  and  to  seek,  within  the  limits 
of  your  State,  those  things  for  which  your  Constitution 
was  ordained  and  established, — to  secure  and  perpetuate 
the  blessings  of  liberty,  to  enjoy  the  gains  of  your  own  in- 
dustry, and  to  promote  your  own  welfare  and  happiness. 

The  significance  of  this  meeting  of  delegates  from  the 
Trans-Mississippi  States  in  this  new  State  of  Oklahoma 
at  this  time  lies  in  its  bearing  on  the  future.  Obstacles 
have  been  removed  and  favorable  conditions  have  been  es- 
tablished, but  the  great  things— the  upbuilding  of  the 
State,  the  increase  in  material  wealth  and  in  moral  power — 
are  yet  to  be  done.  You  have  come  together  to  consider 
how  to  do  some  of  them  in  the  most  advantageous  manner. 


154  Militant  Life  Insurance 

The  theme  assigned  to  me  is  Insurance,  and  at  this  point 
I  ask  "How  is  insurance  related  to  the  prosperity  of  Okla- 
homa and  the  Trans-Mississippi  country,  and  what  place 
should  it  have  in  the  general  scheme  of  your  material  and 
moral  development?"  I  answer  that  good  insurance  is 
a  necessity  to  the  prosperity  of  this  new  State,  that  it  is 
performing  a  most  important  function  in  the  business  de- 
velopment of  the  Trans-Mississippi  country,  and,  if  fos- 
tered and  fairly  protected,  it  can  and  will  perform  a  fur- 
ther service  the  extent  and  value  of  which  cannot  now  be 
foreshadowed.  The  story  of  all  the  older  States  in  the 
Trans-Mississippi  country  is  in  general  terms  about  to  be 
repeated  in  Oklahoma.  Your  people  have  come  into  this 
country  with  strong  arms  and  stout  hearts  and  with  a  few 
hundred  or  a  few  thousand  dollars  in  money.  These  consti- 
tute your  capital,  and  it  is  for  the  protection  of  this  capital 
against  loss  by  death  and  by  fire  that  insurance  is  in  a 
general  way  designed.  If  one  of  your  citizens  puts  all  his 
money  into  a  building  and  the  building  burns,  he  will  suffer 
heavy  loss  and  be  severely  handicapped  for  some  time  to 
come  unless  this  building  is  insured.  Uncovered,  the  loss 
will  indirectly  affect  the  community  in  which  that  man 
lives.  If  he  dies  prematurely  and  dies  uninsured,  his  fam- 
ily will  suffer  heavy  loss  and  be  severely  handicapped  for 
some  time  to  come ;  and  the  State  may  be  subjected  to  con- 
siderable expense  as  a  consequence.  I  suppose  if  any  one 
were  to  ask  the  first  half  dozen  men  he  met  on  the  streets 
of  Muskogee,  "What  is  Oklahoma's  greatest  need?"  at 
least  five  of  them  would  say  "Capital."  And  if  you  asked 
the  same  number  "What  is  the  best  thing  in  Oklahoma?" 
they  would  all  say  "Its  people."  If  then  human  life  and 
capital  are  the  most  important  things  in  the  State,  a  system 
that  protects  individuals  and  families  from  the  loss  of  these 
should  have  a  high  place  among  the  forces  that  will  make 
for  your  upbuilding  as  a  State. 


Insurance:   In  Oklahoma  155 

What  will  be  your  attitude  toward  insurance?  Will 
you  treat  it  as  an  ally  and  protector?  Will  you  disregard 
or  will  you  follow  the  patchwork  legislation  of  most  of  the 
States  of  the  Union?  Will  you  regard  it  as  a  real  servant 
of  the  State,  to  be  wisely  controlled  and  justly  treated? 
Or  will  you  regard  it  as  an  interloper,  an  enemy  to  be 
harried  by  restrictions  and  burdened  with  taxation?  Will 
you  see  that  it  is  sound  and  honest,  and  then  encourage  your 
people  to  make  use  of  it  ?  Or  will  you  turn  its  administra- 
tion over  to  the  political  demagogue  and  discourage  its  use 
by  the  people,  through  legislation  which  morally  at  least 
treats  it  as  an  undesirable  business,  and  makes  every  man 
pay  an  unusual  and  burdensome  tax  who  has  anything  to  do 
with  it? 

In  an  address  which  I  had  the  honor  to  make  before  the 
National  Convention  of  Insurance  Commissioners  in  Rich- 
mond in  September,  I  was  moved  to  say  this: 

"Assuming  competent  and  honest  management,  the  great- 
est menace  to  the  future  of  American  life  insurance  lies  in 
an  increasing  tendency  on  the  part  of  the  various  States 
of  the  Union  to  treat  life  insurance  as  a  local  question,  and 
to  legislate  from  a  local  view-point. " 

I  call  attention  just  here  to  the  program  of  subjects 
discussed  and  to  be  discussed  at  this  convention.  The  proc- 
lamation of  the  Governor  says : 

"This  session  is  called  at  Muskogee  in  the  interest  of 
improved  navigation  upon  the  Arkansas  River  with  the 
ultimate  result  that  there  shall  be  deep  water  to  the  Gulf." 

Farther  reading  of  the  program  shows  such  topics  as 
these— a  Parcels  Post  bill,  a  Federal  Department  of  mines 
and  mining,  the  South  American  trade,  continued  appro- 
priations for  rivers  and  harbors  in  Texas,  on  the  Pacific 
slope  and  at  Honolulu. 

In  other  words,  this  Congress  wishes  legislation  by 
the  National  Government  for  the  removal  of  various 


156  Militant  Life  Insurance 

barriers  to  commerce,  and  Oklahoma  wishes  their  re- 
moval also.  You  would  like  to  load  the  produce  of  your 
fields,  your  mines  and  your  factories  upon  boats  here  and 
have  them  go  to  New  Orleans  without  breaking  bulk.  You 
would  like  to  have  a  free  interchange  of  small  articles  from 
all  over  the  country  by  means  of  the  United  States  mail. 
You  would  like  to  have  your  mines  brought  under  the 
supervision  of  Federal  laws. 

Very  well;  I  agree  with  you  that  these  are  not  local 
questions  and  cannot  properly  be  legislated  upon  as  local 
questions. 

How  about  insurance  ?  Is  that  a  local  question  ?  If 
not,  how  can  you  best  advance  the  extent  and  quality  of  its 
service?  Insurance,  whether  conducted  on  the  mutual 
plan  or  otherwise,  always  represents  the  use  of  capital, 
and  capital  is  always  easily  alarmed.  Should  you,  there- 
fore, surround  the  business  with  a  multitude  of  artificial 
restrictions  and  burden  it  with  taxes?  Or,  should  you 
seek  to  remove  obstacles,  to  demand  publicity  and  responsi- 
bility and  the  "square  deal". 

Let  us  glance  briefly  at  the  tendencies  in  the  other 
States  as  indicated  by  recent  legislative  action  and  note 
some  of  the  results.  During  the  summer  and  fall  of  1905 
we  had  an  investigation  of  life  companies  in  the  State  of 
New  York,  and  during  the  following  winter  the  New  York 
Legislature  enacted  some  very  drastic  laws  respecting  life 
insurance.  Most  of  this  legislation  pertained  to  companies 
organized  within  the  State,  while  a  few  provisions  were 
made  binding  upon  any  life  company  doing  business  with- 
in the  State.  That  was  less  than  two  years  ago.  At  the 
last  meeting  of  the  Actuarial  Society  of  America  a  paper 
was  read  by  Mr.  E.  E.  Rhodes,  of  the  Mutual  Benefit  Life 
Insurance  Company  of  New  Jersey,  reviewing  the  legisla- 
tion had  upon  the  regulation  of  life  insurance  by  other 
States  since  the  passage  of  the  Armstrong  laws  in  New  York. 


Insurance:   In  Oklahoma  157 

This  review  is  made  by  subjects,  so  that  where  two  or 
more  States  have  the  same  provisions  on  the  same  sub- 
ject it  is  mentioned  but  once;  nevertheless  the  review 
makes  a  pamphet  of  over  thirty  pages.  Twenty-seven  States 
have  legislated  upon  thirty-nine  different  subjects  relating 
to  life  insurance,  and  the  number  of  references  to  chapter 
and  section  are  two  hundred  and  sixty.  I  shall  later  on 
refer  to  some  of  the  results  of  this  legislation. 

You  are  met  here  to  urge  the  removal  of  natural  re- 
strictions upon  commerce  and  trade.  The  restrictions  you 
have  in  mind  are  not  artificial,  neither  are  they  imposed 
by  law.  But  suppose,  in  addition  to  the  natural  obstacles 
you  face,  your  commerce  and  trade  were  held  up  at  every 
State  line  and  subjected  to  an  endless  variety  of  artificial 
restrictions  and  regulations?  I  can  imagine  that  this  Con- 
gress would  raise  a  protest  against  such  an  order  of  things 
that  would  be  heard  in  the  remotest  part  of  the  Union. 

Of  course  I  am  aware  that  the  Supreme  Court  of  the 
United  States  has  decided  that  insurance  is  not  commerce 
and  that  a  contract  of  insurance  is  not  an  instrumentality 
of  commerce.  This  decision,  in  effect,  denies  to  a  business 
which  finds  its  greatest  usefulness  and  highest  efficiency 
only  in  interstate  operations,  all  affirmative  rights  out- 
side the  State  of  its  domicile,  and  leaves  its  expansion 
and  success  to  the  justice  and  wisdom  of  the  legislative 
branch  of  each  State  government.  The  position  of  the 
Supreme  Court  doesn't  make  legislation  by  the  States 
easier.  It  makes  legislation  more  difficult.  Nearly  every 
line  in  every  law  lately  written  by  New  York  State— 
and  by  twenty-seven  other  States— has  made  life  insur- 
ance more  difficult  to  do,  and  only  a  few  paragraphs  in 
any  of  the  laws  have  made  insurance  sounder  and  safer. 
The  strange  and  almost  unprecedented  assumption  was 
made  that  here  was  a  business  already  too  strong  and  too 
successful.  And  so,  while  the  most  sacred  interests  were 


158  Militant  Life  Insurance 

involved,  while  billions  of  value  were  concerned,  while  the 
structure  was  the  product  of  sixty  years7  evolution  and 
involved  exact  and  technical  knowledge  on  a  large  number 
of  subjects,  New  York  State  wrote  almost  a  new  code  of 
insurance  in  a  few  weeks  and  went  farther  toward  the  regu- 
lation of  the  details  of  business  by  statute  than  socialistic 
New  Zealand  has  ever  ventured.  The  usefulness  of  in- 
surance and  the  necessity  of  it  remain,  however  the  Supreme 
Court  may  define  it  with  regard  to  commerce  and  however 
narrowly  the  various  States  may  legislate  with  respect  to  it. 

This  Congress  is  peculiarly  calculated  to  forward  the 
interests  for  which  I  speak.  You  represent  geographically 
the  greater  portion  of  the  Union.  While  jealously  guarding 
the  integrity  and  autonomy  of  each  commonwealth,  you  are 
seeking  to  remove  difficulties  which  relate  to  all,  to  forward 
interests  which  are  common  to  all.  In  these  Western  States, 
at  least,  a  man  is  taken  for  what  he  is.  If  he  is  a  man, 
he  doesn't  need  a  decree  of  the  Supreme  Court  in  order 
to  be  recognized  as  such. 

So  useful  has  insurance  come  to  be  that  the  States  have 
generally  welcomed  it,  and  perhaps  under  the  circumstances 
the  wonder  should  be  not  that  laws  are  so  various  and  so 
burdensome,  but  in  the  absence  of  any  compelling  right 
that  they  are  not  worse.  It  is  a  tribute  to  the  average  level- 
headedness of  the  American  legislator  that  the  life  com- 
panies, in  spite  of  misunderstandings  and  hysteria,  have 
as  yet  been  forced  to  leave  only  one  State. 

As  my  theme  is  Insurance  without  any  restrictions,  I  feel 
at  liberty  to  draw  such  illustrations  as  prove  my  point  of 
view  from  any  form  of  insurance,  although  my  appeal  not 
unnaturally  will  have  to  do  chiefly  with  life  insurance. 

It  so  happens  that  the  Trans-Mississippi  territory  has 
recently  furnished  an  illustration  of  the  national  as  against 
the  local,  character  of  insurance  that  men  will  not 
soon  forget.  Less  than  two  years  ago  the  whole  civilized 


Insurance:   In  Oklahoma  159 

world  was  startled  by  the  report  that  the  city  of  San  Fran- 
cisco had  been  destroyed  by  earthquake  and  fire,  that  one 
hundred  thousand  people  had  been  made  homeless,  and  five 
hundred  million  dollars'  worth  of  property  had  been  de- 
stroyed. Five  hundred  million  dollars  was  nearly  one- 
third  of  the  taxable  value  of  all  property  in  the  State 
of  California.  Without  outside  aid  the  loss  would 
have  crushed  the  city  and  crushed  the  State.  The 
total  resources  of  California  fire  insurance  companies  were 
less  than  ten  million  dollars.  You  remember  what  a  mag- 
nificent outpouring  of  sympathy  and  help  there  was  from 
the  whole  civilized  world.  But  consider  for  a  moment  how 
insignificant  the  aid  thus  given  from  outside  the  State  was 
as  compared  with  that  given  by  fire  insurance  com- 
panies. The  total  relief  fund  was  about  eight  million 
dollars ;  the  total  amount  paid  by  fire  insurance  companies 
was  one  hundred  and  ninety  million  dollars.  The  fire  loss 
ratio  for  the  whole  State  of  California  in  that  year  was 
over  one  thousand  per  cent,  of  the  premiums  paid.  This 
San  Francisco  insurance  loss  was  not  only  a  national  affair, 
it  was  an  international  affair,  and  foreign  fire  insurance 
companies  sent  over  the  sea  fifty-nine  millions  in  gold  to 
help  rebuild  San  Francisco. 

No;  insurance — whether  fire  or  life— is  not  a  local 
question.  "But,"  someone  says,— and  this  is  a  favorite 
style  of  attack,— "insurance  companies  come  into  a  new 
State,  where  more  capital  is  needed,  and  take  capital  away. ' ' 
If  this  statement  were  wholly  true,  it  seems  to  me  the  ex- 
perience of  San  Francisco  would  be  its  complete  answer. 
The  merchant  or  real  estate  owner  of  San  Francisco, 
whose  losses  were  measurably  restored  after  that  calamity, 
was  chiefly  interested  in  the  fact  that  the  companies  were 
able  to  redeem  their  contracts.  He  cared  little  then  whence 
came  the  money  which  restored  his  loss.  It  might  come 
from  San  Francisco  or  New  York  or  London.  The  question 


160  Militant  Life  Insurance 

was,  would  it  come  ?  He  realized  then,  as  he  had  not  before, 
that  this  after  all  is  the  supreme  test  of  all  insurance.  But 
the  tendency  to-day  nearly  everywhere  is  to  get  away  from 
this  fundamental  fact.  One  might  conclude,  if  his  judg- 
ments were  formed  from  newspaper  discussions  or  from 
some  statutes  recently  written  in  the  leading  States,  that 
the  matter  of  first  importance  in  life  insurance  particularly 
is  not  that  the  companies  should  be  sound,  but  that  they 
should  distribute  their  assets  down  to  narrow  margins,  that 
they  would  limit  their  business,  that  the  judgment  of 
Trustees  with  regard  to  securities  should  be  surrendered. 
These  are  questions  of  more  or  less  importance  as  they 
involve  the  efficiency  and  integrity  of  management.  But 
the  question  of  first  importance,  after  all,  is  that  insurance 
shall  keep  faith  with  its  patrons.  Much  of  the  recent  legis- 
lation makes  this  more  difficult,  and,  if  further  legislation 
on  the  same  theory  is  had,  it  will  not  only  curtail  the  use- 
fulness of  insurance  but  may  make  it  impossible  for  it  to 
keep  faith.  If  to  keep  its  faith  the  companies  seem 
temporarily  to  take  capital  away  from  any  given  point, 
that  action  can  hardly  be  considered  unpatriotic  or 
unsound. 

But  the  charge  as  made  is  not  true,  and  I  will  undertake 
to  answer  the  charge  directly  in  its  bearings  upon  Okla- 
homa and  the  Trans-Mississippi  country. 

Of  the  money  collected  in  life  insurance  premiums  the 
first  expenditures  are  for  commissions,  medical  examina- 
tions, inspection  and  local  supervision— all  of  which  are 
made  on  the  field.  Other  expenditures  are  for  current 
losses,  dividends,  matured  and  purchased  policies,— and 
these  are  also  made  on  the  field.  Remaining  expenditures 
are  for  Home  Office  salaries,  general  expenses,  and  taxation 
by  the  various  States.  Of  these  three  items,  the  last  annual 
report  of  the  New- York  Life  Insurance  Company  shows 
that  the  Home  Office  salaries  were  1.54  per  cent,  of  pre- 


Insurance:   In  Oklahoma  161 

miums  received,  general  expenses  were  1.23  per  cent.,  taxes 
were  1.16  per  cent.  The  taxes  were  paid  on  the  field  of 
course.  The  remaining  item— contribution  to  the  reserve 
fund  to  secure  the  final  payment  of  policies— was  equal  to 
about  40%  of  the  premium  receipts,  and  over  half  of  this 
came  from  interest. 

But  let  us  follow  up  this  contribution  to  reserve  and  see 
what  becomes  of  it.  In  order  to  carry  out  the  contract  with 
the  insured  the  reserve  must  be  invested;  and  the  amount 
of  investments  of  this  kind  on  November  1,  1907,  in  the 
New- York  Life  Insurance  Company,  was  approximately 
five  hundred  million  dollars.  I  use  the  figures  of  this  Com- 
pany only  because  I  am  familiar  with  them.  The  conclusions 
to  which  they  point  would  be  indicated  possibly  with  even 
greater  force  if  I  could  analyze  and  present  the  aggregate 
investments  of  all  companies  doing  business  in  this  terri- 
tory. An  analysis  of  the  investments  of  the  New- York  Life 
shows  that  over  one  hundred  million  dollars  out  of  five  hun- 
dred million  dollars  was,  on  November  1,  1907,  located  in 
the  Trans-Mississippi  country.  The  investments  were 
divided  as  follows: 

Real  Estate  owned $2,940,000 

Real  Estate  mortgages 2,923,000 

Loans  to  policy-holders 13,085,000 

Railroad  Bonds,  on  basis  of  mileage 60,649,000 

State  and  Municipal  holdings 1,961,000 

Other  Railroad  Bonds  which  cannot  be 
apportioned  to  mileage  yet  are  obli- 
gations of  railroad  companies  oper- 
ating in  the  Trans-Mississippi  States. 21,865,000 
Other  Investments  1,125,000 

Total $104,548,000 

In  the  Trans-Mississippi  country,  the  outstanding  in- 
surance on  the  books  of  the  New- York  Life  on  November 


162  Militant  Life  Insurance 

1,  1907,  aggregated  $425,146,000.  This  is  about  21%  of 
the  Company's  outstanding  business;  while  the  investments 
of  the  Company  in  the  same  territory  are  a  little  over  20% 
of  its  assets.* 

This  is  a  rough  sketch  of  the  relation  existing  between 
the  business  and  the  investments  of  a  Company  which,  for 
a  long  time,  has  operated  in  all  the  Trans-Mississippi 
country,  during  which  period  investments  have  been  made 
entirely  without  legislative  coercion. 

In  the  development  of  business,  trustees  have  observed 
those  great  laws  which  even  Legislatures  cannot  contra- 
vene. Investments  have  been  made,  first  for  security,  and 
second,  to  secure  the  best  rate  of  interest.  Investments 
have  sought  the  Trans-Mississippi  country  in  obedience  to 
a  natural  law ;  and  the  danger  has  been  n9t  that  trustees 
would  invest  too  little,  but  that,  attracted  by  extraordi- 
nary rates  of  interest,  they  would  invest  too  much. 

Then  observe  how  naturally  and  inevitably  the  busi- 
ness of  insurance,  in  its  volume  and  its  methods,  in  its  con- 
tract forms  and  in  its  benefits,  outgrew  localities,  and  took 
on  an  interstate  and  an  international  character.  The  con- 
tracts of  life  insurance  were  really  standardized  by  the 
companies  before  they  were  standardized  by  the  State. 
The  great  companies  wrote  substantially  the  same  form 
of  policy  at  almost  the  same  premium  over  the  entire 
civilized  world.  Life  companies  chartered  by  the  State 
of  New  York  have  now  outstanding  over  eleven  and 
a  half  million  policies.  Of  these  about  two  million, 
two  hundred  thousand  are  on  the  lives  of  citizens  of 
New  York  State.  On  the  other  hand,  companies  chartered 
in  other  States  have  two  million,  six  hundred  thousand 
policies  on  the  lives  of  citizens  of  New  York  State.  The 
policy-holders  in  mutual  companies  wherever  chartered 


*See  memorandum  attached. 


Insurance:   In  Oklahoma  163 

have  equal  rights  to  vote  for  directors,  and  their  rights 
are  effectively  safeguarded.  In  the  payment  of  claims  and 
benefits,  indeed  in  the  performance  of  all  functions,  the 
companies  knew  no  State  lines.  All  restrictions  as  to  resi- 
dence and  travel  in  any  State  in  the  Union  were  long  ago 
eliminated  from  life  policies.  Notwithstanding  all  this, 
notwithstanding  the  fact  that  economy  makes  it  impera- 
tive that  a  New  York  State  company  should  write  the  same 
contract  with  the  same  premiums  and  the  same  benefits  in 
Maine  and  in  California,  and  although  such  is  the  fact, 
the  various  States  continue  to  legislate;  and  California,  or 
Louisiana,  or  Wisconsin  may  easily  and  without  much 
consideration  enact  a  law  which  will  make  it  necessary  for 
a  company  to  retire  from  that  State  or  to  revise  its  whole 
program  of  business  all  over  the  world  at  a  heavy  cost. 
In  saying  what  a  foreign  life  company  may  or  may  not  do 
within  his  State,  the  legislator  sometimes  says,  whether 
he  intends  to  or  not,  what  it  may  or  may  not  do  in  every 
other  State  in  the  Union,  and  possibly  what  it  may  or  may 
not  do  in  all  the  civilized  world. 

There  were  abuses  in  life  insurance  that  it  was  neces- 
sary to  correct.  They  deserve  every  honest  man's  repro- 
bation. Not  unnaturally  every  State,  whether  it  had  life 
companies  of  its  own  or  not,  felt  called  on  to  take  a  hand 
in  the  matter.  It  is  time  now  to  notice  some  of  the  results. 
For  that  purpose,  I  venture  again  to  quote  from  the  re- 
marks which  I  made  to  the  Insurance  Commissioners  of 
the  United  States  in  Richmond  last  September,  as  follows : 

1 '  The  close  of  1906  showed  outstanding  on  the  books  of 
the  regular  level-premium  American  life  insurance  com- 
panies nearly  a  billion  dollars  less  insurance  in  force  than 
would  have  been  in  force  if  the  rate  of  development  and 
progress  shown  by  the  companies  at  the  close  of  1904  had 
been  maintained  during  the  two  succeeding  years.  In 
making  up  the  gain  and  loss  of  the  last  two  years  this  tre- 


164  Militant  Life  Insurance 

mendous  item  must  have  attention.  It  consists  of  positive 
and  negative  waste;  positive  waste  in  the  hundreds  of 
millions  of  business  lost;  negative  waste  in  other  hundreds 
of  millions  not  created.  Waste  may  consist  of  things  not 
done.  Fear  is  waste.  Doubt  is  waste.  Spread  a  general 
condition  of  distrust  throughout  business  and  the  results 
may  be  as  deadly  as  those  which  attend  fire,  flood  and  earth- 
quakes. A  general  paralysis  of  the  agencies  that  make  for 
good  means  widespread  destruction.  That  condition  to 
some  extent  exists  to-day  in  general  business,  and  mark- 
edly so  in  life  insurance." 

That  condition  in  general  business  has  begun  to  assert 
itself  and  what  has  followed?  A  few  badly  managed 
banks  and  trust  companies  obliged  to  close  their  doors, 
but  a  still  larger  number  that  were  solvent  temporarily 
suspend  payment,  and  still  other  solvent  institutions  sub- 
jected to  runs  and  heavy  withdrawals  of  cash  at  a  time 
when  the  whole  business  community  was  suffering  for 
lack  of  ready  money ;  the  clearing  houses  of  all  the  larger 
cities  issuing  certificates  of  indebtedness  based  on  securi- 
ties with  which  to  pay  the  balances  which  the  banks  owed 
each  other  on  daily  settlements;  the  prices  of  bonds  and 
stocks  at  the  lowest  point  seen  in  years, — prices  at  which 
New  York  City  bonds  yield  nearly  four  and  a  half  per 
cent,  on  the  cost,  and  standard  railroad  stocks  with  long 
dividend  records  yield  six  per  cent,  or  over;  prices  of 
grain  and  cotton  rapidly  falling.  The  question  is  no 
longer  asked,  Will  there  be  a  business  depression?  as 
there  has  been  a  depression  in  the  price  of  securities? 
The  depression  is  here,  and  the  only  question  is,  How 
severe  will  it  be  and  how  long  will  it  last?  "Fear  is 
waste, "  and  "doubt  is  waste "  because  they  paralyze  the 
forces  that  make  for  good.  No  doubt  there  have  been 
abuses  in  business,  but  in  the  main  business  has  been  and 
is  on  a  sound  foundation.  The  abuses  had  to  be  corrected, 


Insurance:  In  Oklahoma  165 

but  in  their  correction  fear  crept  in,  doubt  crept  in,  and 
here  we  are.  Destruction  is  always  easy.  Suspicion  and 
selfishness  never  sleep.  Reform  which  is  statesmanlike — 
whether  in  general  business  or  in  insurance — does  not 
seek  to  destroy,  does  not  appeal  to  passion  and  suspicion. 


It  is  a  truism  to  say  that  in  all  departments  of  govern- 
ment Oklahoma  has  an  opportunity  to  teach  the  world  a 
lesson.  I  am  not  so  sure  that  we  state  the  whole  case  un- 
less we  add  that  in  substantially  all  departments  of  legis- 
lation Oklahoma  ought  to  teach  the  world  a  lesson;  other- 
wise what  use  will  you  have  made  of  the  experience  of  the 
other  States  ?  How  will  you  have  utilized  the  liberty  and 
the  opportunity  and  the  individual  freedom  of  the  Great 
West  ?  The  State  has  made  a  notable  beginning.  It  is  the 
only  State  which,  in  its  organic  law,  recognizes  the  im- 
portance of  insurance.  It  is  the  only  State  whose  consti- 
tution provides  that  one  of  the  Executive  Officers  of  the 
State  shall  be  the  Commissioner  of  Insurance.  This,  it 
seems  to  me,  is  beginning  right.  What  should  the  next 
step  be? 

I  am  tempted  at  this  point  to  undertake  a  discussion 
of  too  many  topics.  I  would  like  to  emphasize  the  neces- 
sity of  legislation  in  a  State  like  this  which  shall  deal  only 
with  the  fundamental  things, — with  solvency,  with 
strength,  with  justice,  with  facility  in  the  transaction  of 
business.  Assuming  a  cordial  desire  to  forward  every 
interest  which  will  tend  to  develop  the  industries  and 
wealth  of  the  State,  I  would  like  to  emphasize  my  view  of 
what  your  attitude  ought  to  be  towards  the  taxation  of 
life  insurance  premiums. 

In  substantially  every  organized  form  of  society  that 
has  ever  existed  there  has  been  a  recognition  of  the  fact 
that  it  was  good  public  policy  to  encourage  the  growth  of 


166  Militant  Life  Insurance 

certain  ideas  and  interests,  whether  all  individual  citizens 
were  directly  benefited  by  such  growth  or  not.  For  ex- 
ample, when  Colorado  became  a  State,  provision  was 
inserted  in  the  Constitution  exempting  mining  property 
from  all  taxation  for  a  period  of  ten  years.  This,  of 
course,  put  all  the  burden  of  taxation  on  other  forms  of 
property,  but  it  was  the  judgment  of  the  men  who  framed 
the  Constitution  and  of  the  people  who  adopted  it  that  the 
added  burden  was  warranted  because  of  the  encourage- 
ment which  would  thereby  be  given  to  mining  enterprises 
and  the  ultimate  benefit  which  would  accrue  to  all  forms 
of  property  in  the  State.  The  same  idea  on  a  much  larger 
scale  is  represented  in  the  exemption  of  church  and  school 
property  from  taxation.  It  is  stated  on  good  authority 
that  the  value  of  property  owned  to-day  in  the  United 
States  by  the  various  churches  is  five  thousand  million 
dollars,  and  none  of  it  is  taxed.  It  is  not  taxed  because 
the  controlling  opinion  has  been  that  the  Church  was  a 
benefit  to  the  State,  that  its  influence  upon  the  whole  was 
of  value  to  every  citizen,  that  its  work  ought  to  be  en- 
couraged, and  that  the  burden  of  taxation  ought  to  be 
placed  on  other  forms  of  property. 

Of  course,  in  exempting  church  property  from  tax- 
ation, every  tax-payer,  believer  and  unbeliever,  is  taxed 
to  make  up  for  the  exemption.  If  property  owned  by  the 
Church  pays  no  tax,  then  other  property  pays  more  tax. 
So  the  State  in  effect  has  said  that  the  unbeliever  should 
be  indirectly  taxed  for  the  support  of  the  Church  because 
the  Church  is  a  public  benefit. 

Every  one  of  these  arguments  applies  with  almost 
equal  force  to  the  premiums  of  life  insurance.  We  have 
now  reached  a  period  where  it  is  difficult  to  find  a  man 
who  will  claim  that  life  insurance  is  not  a  public  benefit. 
Substantially  every  citizen  recognizes  the  conservative 
value  of  life  insurance ;  not  alone  in  the  burdens  of  which 


Insurance:   In  Oklahoma  167 

it  relieves  the  State;  not  alone  in  its  fight  against  want 
and  poverty;  not  alone  in  the  protection  which  it  affords 
the  defenceless — the  opportunities  which  it  gives  boys 
and  girls  where  otherwise  there  would  be  no  opportunity 
— but  in  the  part  it  plays  in  the  industrial  development  of 
the  country, — in  the  demand  which  it  creates  for  good 
securities;  in  the  conservative  position  which  it  takes 
with  regard  to  securities ;  in  the  great  centres  of  financial 
conservatism  and  strength  which  it  necessarily  creates. 
And  yet,  while  life  insurance  plays  all  these  important  func- 
tions in  society,  it  has  been  taxed  and  is  still  taxed  as 
though  it  were  in  some  fashion  a  public  menace,  or,  if  not 
that,  at  least  a  strictly  private  enterprise  in  which  the 
State  had  no  direct  interest,  and  indeed  an  enterprise  of 
which  the  State  in  its  necessity  may  take  advantage. 

Under  the  system  of  taxation  adopted  by  the  various 
States  in  this  country,  in  one  form  or  another  every  dollar 
of  premiums  paid  by  the  policy-holder  is  taxed.  These 
taxes  range  from  a  fraction  of  one  per  cent,  in  one  or 
two  States  up  to  more  than  three  and  one-half  per  cent,  in 
one  State. 

The  premiums  which  the  insured  pay  are  in  themselves 
a  tax,  self-imposed.  The  great  body  of  them  represent 
serious  economies,  and  even  sacrifices,  on  the  part  of  the 
policy-holders.  They  represent  savings  which  more  di- 
rectly benefit  the  State  than  any  other  form  of  invest- 
ment, and  yet  while  the  State  exempts  school  property 
and  church  property,  it  taxes  the  premiums  of  life  insur- 
ance. A  parallel  argument  may  be  made  with  respect  to 
the  exemption  from  taxation  of  savings  bank  deposits. 
The  man  who  puts  his  money  at  interest  in  a  savings  bank 
is  not  taxed;  the  man  who  puts  his  money  into  life  insur- 
ance is  taxed.  There  is  a  monstrous  inconsistency  in  this 
situation  somewhere. 

There  has,  beyond  any  question,  been  a  decided  ad- 


168  Militant  Life  Insurance 

vance  of  late  in  the  campaign  against  special  privilege 
and  special  advantage,  as  against  the  general  public. 
Railroad  passes  have  been  abolished,  and  everybody  ap- 
plauds the  action.  There  are  other  special  privileges  and 
advantages  which  ought  to  be  abolished,  and  they  will  be. 
But  my  argument  goes  to  this  conclusion:  that  if  as  a 
matter  of  public  policy  it  is  just  and  wise  to  exempt 
school  property  and  church  property  and  some  other 
forms  of  property  from  taxation,  then  the  premiums  of 
life  insurance  ought  to  enjoy  the  same  exemption. 

While  the  tendency  has  been  steadily  to  increase  this 
taxation,  and  while  State  after  State  has  taken  the  matter 
up  and  in  no  instance  that  I  can  recall  has  any  State  re- 
duced the  rate,  still  it  seems  to  me  there  is  a  better  day 
coming.  Here  and  there  an  Insurance  Commissioner  rises 
up  and  protests  against  such  taxes.  The  disposition  of 
Insurance  Commissioners  hitherto  has  been  to  take  all 
they  could  get  in  order  to  make  a  good  record  for  their 
Department  of  the  State  government.  The  immense 
publicity  which  life  insurance  has  had  within  two  years, 
notwithstanding  the  fact  that  some  of  the  disclosures 
were  shameful,  has  spread  a  better  knowledge  of  what  it 
is  and  what  it  means,  and  gives  good  ground  for  the  hope 
that  the  policy-holders  themselves  are  about  ready  to 
appreciate  not  only  the  interest  which  they  have  at  stake 
but  the  power  which  they  can  exercise  if  they  see  fit  to 
do  so. 

Life  insurance  within  two  years  has  been  put  to  shame 
within  its  own  household,  but  the  staggering  blow  which 
it  has  received  came  after  all  from  badly  conceived  legis- 
lation. 

I  contend  that  the  legislation  which  stopped  the  gen- 
eral development  of  life  insurance,  which  not  only  cur- 
tailed its  annual  production  of  new  business  but  which 
went  so  far  as  positively  to  force  a  shrinkage  in  the  vol- 


Insurance:   In  Oklahoma  169 

ume  of  its  outstanding  insurance,  was  an  economic  crime. 
It  was  an  offence  possibly  worse  than  that  inefficiency 
which  in  New  York  City  leaves  thousands  of  children 
without  any  access  to  the  public  schools  simply  because 
there  are  not  public  schools  enough.  This  economic  mis- 
take or  crime  will  not  be  remedied  unless  the  policy- 
holders  demand  that  it  be  remedied.  The  politician  whose 
business  is  governing  does  what  he  thinks  the  people 
want,  because  he  believes  that  his  own  continuance  in 
power  is  dependent  upon  pleasing  the  people.  He  legis- 
lated unreasonably  against  life  insurance  because  he 
thought  the  temper  of  the  people  demanded  it.  He  will 
legislate  again  and  more  reasonably  when  he  thinks  he 
hears  the  same  voice  demanding  such  legislation. 

No  good  life  insurance  man  and  no  wise  policy-holder 
wants  irresponsible  management,  and,  therefore,  they 
don't  desire  the  repeal  of  any  just  and  proper  law.  They 
want  complete  publicity ;  they  want  administration  which 
must  live  and  move  in  the  sunlight;  they  want  their  full 
equity  in  the  premiums  which  they  pay;  but  in  insuring 
the  receipt  of  that  equity  they  don't  want  the  companies 
driven  to  the  point  where  solvency  is  threatened  or  where 
trustees  are  faced  with  the  penitentiary  for  clerical  er- 
rors. They  don't  want  to  embarrass  by  a  multiplicity  of 
regulations  a  business  unsurpassed  in  its  usefulness,  and 
perhaps  unequalled  in  its  possibilities  when  conducted 
under  sound  public  policy. 

You  seek  the  removal  of  natural  restrictions  and  bar- 
riers to  commerce.  Has  it  ever  occurred  to  you  that  be- 
fore we  reach  the  subject  of  legislation  at  all,  insurance, 
and  especially  life  insurance,  has  to  remove  similar  re- 
strictions and  similar  barriers?  The  natural  restrictions 
with  which  a  life  insurance  company  has  to  struggle  are 
the  indifference  and  inertia  of  men,  the  natural  lack  of 
responsibility  which  exists  in  all  grades  of  society,  the 


170  Militant  Life  Insurance 

lack  of  any  just  appreciation  of  what  the  contract  of 
marriage  means,  what  the  family  means,  how  dependent 
the  State  is  on  the  condition  of  the  family.  Another  natu- 
ral barrier  is  the  difficulty, — and  it  is  a  difficulty, — of 
keeping  money  so  soundly  invested  at  all  times  that  in 
spite  of  war  and  panic  it  shall  yield  a  given  rate  of  in- 
terest continuously  and  answer  for  the  principal  in  due 
course.  These  are  grave  problems  even  when  trustees  are 
unhampered  by  affirmative  and  negative  restrictions; 
they  are  problems  when  trustees  are  free  to  follow  their 
own  judgment  and  their  own  sense  of  responsibility. 

This  Congress  seems  to  me  to  open  a  door  of  hope,  to 
foreshadow  the  dawn  of  a  fairer  day.  Public  opinion  has 
been  led  of  late  to  emphasize  the  force  of  that  great  com- 
mandment, '  l  Thou  shalt  not  steal. ' '  But  I  would  have  the 
public  opinion  of  Oklahoma,  where  of  all  places  in  the 
world  men  can  be  just  and  fear  not,  teach  the  world  that 
the  time  has  come  in  the  interest  of  common  safety  to 
emphasize  the  force  of  that  other  great  commandment, 
"Thou  shalt  not  bear  false  witness  against  they  neigh- 
bor." 

Your  declared  purpose  is  to  remove  obstacles,  not  to 
create  them ;  to  emancipate  business,  not  to  shackle  it ;  to 
increase  values,  not  to  limit  them. 

Insurance  has  asked  no  favors.  It  has  accepted  no 
bounties  and  demanded  no  subsidies.  It  has  not  asked  the 
people  of  the  country  to  tax  themselves  in  order  to  keep 
out  foreign  competition;  on  the  contrary,  it  has  so  com- 
pletely occupied  its  own  field  that  with  the  exception  of 
the  fire  insurance  companies  foreign  competitors  have  not 
thriven.  Life  insurance  has  done  more.  It  has  crossed 
every  sea  and  planted  its  banners  upon  every  civilized 
shore.  It  has  succeeded  without  government  help,  and  in 
spite  of  obstacles  created  by  government.  It  has  paid  its 
own  expenses  and  contributed  millions  to  the  support  of 


Insurance:   In  Oklahoma  171 

government.  In  times  of  financial  strain  and  stress  it  is 
a  great  centre  of  conservatism,  and  while  other  institu- 
tions are  shaken  and  sometimes  brought  down  in  ruins, 
life  insurance  in  its  financial  responsibility  is  substan- 
tially unaffected.  Where  conducted  on  the  mutual  plan, 
it  is  not  even  seeking  to  make  money.  It  is  always  serv- 
ing the  State.  It  is  here  to-day  to  ask  that  in  Oklahoma 
at  least  it  be  allowed  to  fulfil  its  benign  mission ;  that  the 
disposition  to  harass  it  with  needless  restrictions,  to  bur- 
den it  with  unjust  taxation,  elsewhere  evident,  find  no 
opportunity  here;  and  that  this  State,  by  its  enlightened 
example,  deliver  an  effective  rebuke  to  those  States  which, 
having  given  insurance  companies  their  birth,  seem  now 
disposed  to  destroy  them  and  their  usefulness  through 
illogical  and  repressive  legislation. 

And  finally,  may  I  express  the  hope  that  statesman- 
ship of  such  high  order  will  assert  itself  in  the  first  ses- 
sion of  the  Legislature  of  Oklahoma  as  to  deliver  a  direct 
rebuke  to  those  so-called  leaders  of  public  opinion  who 
have  been  teaching  the  country  to  distrust  its  own  institu- 
tions and  its  own  citizenship.  At  the  time  of  a  great 
crisis  forty  years  ago,  James  A.  Garfield  faced  a  mob  in 
Wall  Street  and  brought  it  back  to  reason  by  crying  out 
"God  reigns  and  the  Government  at  Washington  still 
lives ".  Untouched  by  the  suspicion  and  fear  which  false 
leaders  have  cultivated,  Oklahoma,  although  the  youngest 
of  the  States,  can  by  the  sanity  of  her  legislation  and  the 
correctness  of  her  attitude — not  merely  toward  insurance, 
but  toward  all  business — reinforce  the  fact  that  the  op- 
timism and  the  love  of  justice  and  the  courage  and  the 
energy  and  the  faith,  which  have  made  all  this  mighty 
West,  still  live. 


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NEW  YORK  STATE  AND 
LIFE  INSURANCE  LEGISLATION 


AN  ADDRESS  BEFORE  THE  FIBST  ANNTTAI,  MEETING  OF  THE  ASSOCIATION  OF  LIFK 
INSUBANCE  PRESIDENTS,  NEW  YOKK,  N-  Y.,  FRIDAY,  DECEMBER  6,  1907 


BELONG  to  what  may  be  called  the  mili- 
tant school  of  life  insurance.  If  the 
theory  of  life  insurance  is  sound— and 
that  has  been  demonstrated — if  its  pro- 
fessions of  usefulness  have  stood  the  test 
of  time  and  its  product  has  actually  be- 
come a  part  of  the  fabric  of  civilization— 
which  is  a  fact — then,  in  common  with 
many  others,  I  hold  that  they  who  follow 
this  calling  have  a  warrant  for  unlimited  activity:  a  war- 
rant for  activity  and  insistence  kindred  to  that  warrant 
which  underlies  all  enterprises  planned  to  widen  the  scope 
of  commerce,  all  movements  which  seek  to  better  the  con- 
ditions of  peoples,  all  plans  which  seek  to  advance  public 
morality ;  kindred  if  not  equal  to  that  instinct  which  results 
in  national  growth ;  and,  in  some  degree  at  least,  akin  to  that 
moral  ecstasy  which  invites  almost  any  hazard  and  cheer- 
fully undertakes  almost  any  burden  in  order  to  advance  a 
religious  conviction. 

173 


174  Militant  Life  Insurance 

Speaking  as  a  life  insurance  man  to  life  insurance  men 
and  to  others  interested  in  life  insurance,  I  think  I  may  say 
without  offence  that  the  period  through  which  we  have  been 
passing,  and  from  which  we  hope  we  are  emerging,  has  not 
been  a  judicial  period ;  it  has  not  been  one  in  which  public 
discussion  has  been  altogether  dispassionate,  indeed,  from 
the  nature  of  the  case,  it  could  not  be  so.  But  the  time  has 
now  come  when  all  men,  and  especially  the  legislators  of 
the  State  of  New  York,  ought  to  review  the  case  in  the  light 
of  experience,  and  it  is  with  that  thought  in  mind  that  I 
address  myself  to  a  brief  discussion  of  some  of  our  recent 
legislation. 

Mr.  Gladstone  characterized  the  Constitution  of  the 
United  States  as  "the  most  wonderful  work  ever  struck 
off  at  a  given  time  by  the  brain  and  purpose  of  man".  We 
not  unnaturally  have  always  interpreted  this  famous  dictum 
as  a  compliment  of  the  first  order,  as  evidence  of  the  super- 
lative wisdom  of  the  fathers  of  the  State.  It  seems  to  me, 
however,  that  Mr.  Gladstone  uttered  a  profound  criticism 
rather  than  an  unqualified  approval  of  our  fundamental 
law.  He  had  in  mind  undoubtedly  what  is  known  as  the 
English  Constitution,— a  body  of  precepts  which  has  grown 
up  slowly  through  the  centuries.  He  was  thinking  of  the 
difficulty  of  legislating  wisely  at  any  time  in  new  fields. 
He  paid  a  high  tribute  to  the  intelligence,  the  wisdom,  and 
the  unselfish  patriotism  of  the  men  who  wrote  our  Consti- 
tution, but  he  uttered  a  profound  truth  when  he  said  that 
this  work  was  wonderful  and  chiefly  wonderful  because  it 
was  "struck  off  at  a  given  time".  He  unquestionably 
meant  to  point  out  the  great  difficulty  of  legislating  wisely 
when  legislating  quickly.  He  meant  that  new  legislation 
is  generally  imperfect  legislation,  that  it  must  be  followed 
by  intelligent  observation  and  supplemented  by  amend- 
ments which  experience  shows  to  be  necessary.  Every  popu- 
lar movement  of  importance  has  its  reaction,  partly  because 


New  York  State  and  Life  Insurance  Legislation    175 

of  the  inherent  difficulty  of  wise  action  at  such  times,  but 
usually  because  such  movements  go  too  far.  Roused  to 
frenzy  by  real  abuses  and  by  exaggerated  reports  of  abuses, 
the  representatives  of  the  people  legislate  in  haste  and 
sometimes  in  anger,  and,  while  their  motives  are  usually 
above  question,  the  statute  books  bear  eloquent  and  volumi- 
nous testimony  to  the  difficulties  which  they  have  encoun- 
tered. 

It  would  have  been  a  new  thing  in  the  history  of  legis- 
lation if  this  State  in  1906  had  been  able  to  strike  out  into 
a  new  field  and  enact  a  body  of  laws  that  should  prove 
wholly  wise  and  beneficial.  The  legislation  of  that  year 
followed  a  period  of  great  excitement.  No  life  insurance 
company  had  become  insolvent  or  had  failed  to  meet  its 
current  obligations  promptly,  but  certain  kinds  of  abuses 
—which  we  have  since  learned  were  not  confined  to  life 
insurance— were  first  laid  bare  in  our  business,  and  the 
demand  was  for  drastic  correction. 

In  order  that  review,  revision  and  amendment  may  pro- 
ceed sedately  and  wisely,  the  Legislature  of  1908  will  do 
well  to  observe  the  statesmanlike  action  of  Governor  Hughes 
in  lately  appointing  a  committee  of  experts  to  study  the 
financial  situation  and  report  what,  if  any,  legislation  is 
needed.  Regrets  that  such  action  was  not  taken  in  1906 
and  that  the  needs  of  life  insurance  were  not  first  reviewed 
by  a  similar  body  avail  now  only  because  they  enforce  the 
wisdom  of  proceeding  cautiously  even  with  revision. 

The  New  York  Herald,  on  February  4,  1906,  in  fore- 
casting the  contents  of  the  report  of  the  Armstrong  Com- 
mittee, said  that  it  would  demand  that  life  insurance  in 
its  old  forms  should  be  swept  out  of  existence.  That,  of 
course,  was  an  overstatement,  but  it  foreshadowed  action 
much  more  violent  than  seemed  possible  at  the  time. 
The  radical  character  of  the  recommendations  of  the 
Committee  and  the  radical  character  of  some  of  the 


176  Militant  Life  Insurance 

legislation  which  followed  had  not  so  much  to  do  with 
life  insurance  as  it  then  was,  as  with  life  insurance 
as  it  was  to  be;  that  is  to  say,  the  new  laws  were  most 
radical  where  they  introduced  entirely  new  methods, 
where  they  legislated  in  entirely  new  fields,  where  they 
undertook  to  establish  regulations  not  by  amendments  but 
by  wholly  new  enactments  on  subjects  without  precedent 
legislation. 

I  cannot  within  any  reasonable  time  discuss  all  the 
phases  of  this  legislation,  which  may  be  roughly  grouped 
under  the  following  heads : 

First. — Directors. 

Second.— Agents. 

Third. — Misrepresentations. 

Fourth.— Policies. 

Fifth. — Disbursements. 

Sixth. — Valuations. 

Seventh. — Securities. 

Eighth.— Publicity. 

Ninth. —Limitations. 

There  was  a  variety  of  legislation  outside  these  sub- 
jects, and  one  especially  worthy  of  attention  was  an 
omnibus  provision  making  it  a  misdemeanor  in  addition  to 
any  other  penalty  otherwise  prescribed,  excepting  where 
such  offence  constitutes  a  felony,  for  any  person  or  cor- 
poration to  violate  any  of  the  provisions  of  the  insurance 
law. 

DIRECTORS. 

It  is  not  my  purpose  to  urge  any  modification  of  the  ex- 
isting statutes  with  regard  to  the  election  of  Directors  in 
mutual  companies,  although  I  believe  amendments  will 
come  naturally  in  the  course  of  time  from  the  situation 
itself,  but  it  is  pertinent  to  call  attention  to  the  radical 


New  York  State  and  Life  Insurance  Legislation    177 

character  of  the  action  taken  by  the  Legislature  on  this 
subject.  Of  the  twenty-nine  charters  of  life  companies  of 
New  York  published  in  the  Insurance  Department's  Re- 
port of  1868  only  six  provided  for  so  short  a  term  of  ser- 
vice as  two  years,  and  these  were  all  stock  companies. 
Twelve  provided  a  period  of  three  years,  eight  a  period  of 
four  years,  and  one  a  period  of  five  years.  Of  the  thirty- 
two  charters  published  in  the  Wisconsin  Report  of  1906 
six  prescribed  a  one-year  term,  ten  a  four-years'  term,  one 
a  five-years'  term,  and  one  a  seven-years'  term. 

Admitting,  for  the  sake  of  argument,  that  the  con- 
ditions disclosed  with  regard  to  the  election  of  Directors 
in  mutual  companies  warranted  the  extraordinary  pro- 
ceeding under  which  all  Directors  then  in  office,  duly 
elected  by  the  policy-holders  under  their  charter  rights, 
were  excluded  from  further  service  on  a  given  date,  and 
warranted  the  cancelation  of  all  the  powers  of  attorney  then 
in  existence,  executed  by  the  policy-holders  giving  persons 
the  right  to  vote  on  their  behalf,  was  it  consistent  with 
experience  and  sound  public  policy  to  limit  the  term  of 
service  of  Directors  in  mutual  companies  to  a  period  of 
two  years  ?  And  again,  after  the  policy-holders  had  made 
their  choice,  in  an  election  unprecedented  in  its  publicity, 
complete  in  its  right  of  franchise,  how  shall  we  explain 
the  action  of  the  Legislature  of  1907  which  again  modi- 
fied the  law  so  as  to  compel  the  election  of  full  Boards 
in  1909  and  biennially  thereafter?  This  leaves  the  great 
mutual  companies  exposed  once  in  two  years  to  the  perils 
of  an  election  which  in  the  nature  of  the  case  involves 
heavy  expense  and  the  possibility  of  revolutionary 
changes.  The  Boards  are  no  longer  to  be  changed  frac- 
tionally, as  is  the  case  with  substantially  every  other  form 
of  corporation,  but  the  control  of  these  great  institutions 
at  least  once  in  two  years  now  invites  the  attention  of  that 
particular  type  of  corporation  financier  with  whose  opera- 


178  Militant  Life  Insurance 

tions  we  have  lately  become  somewhat  familiar  in  New 
York. 

It  is  hardly  worth  while  now  to  review  the  bitter  fight 
that  was  made  for  the  control  of  the  Mutual  Life  and  the 
New- York  Life  in  the  last  election  for  Directors.  The  elec- 
tion was  held  under  the  supervision  of  the  Insurance  De- 
partment, which  had  complete  control  of  the  polling  lists, 
the  form  of  ballot,  the  method  of  voting  under  the  law, 
and  the  canvassing  of  the  ballots  cast.  The  result  in  the 
case  of  the  Mutual  Life  was  announced  about  five  months 
after  the  polls  closed,  and  in  the  case  of  the  New- York 
Life  almost  exactly  six  months  after  the  polls  closed. 
The  necessary  expenses  in  the  case  of  the  latter  Company- 
expenses  paid  by  the  policy-holders — was  over  $200,000. 
The  law  was  so  imperfect  that  many  thousands  of  policy- 
holders  were  disfranchised  through  their  inability  to  un- 
derstand the  complications  of  the  ballot.  Without  im- 
puting unworthy  motives  to  any  one,  it  is  proper  to  note 
the  fact  that  the  records  of  the  District  Attorney's  office 
in  New  York  County  show  that  the  opportunity  for  con- 
trol of  these  great  corporations  constituted  a  temptation 
so  alluring  that  the  Grand  Jury  has  charged  certain  men 
with  conspiracy  and  forgery  in  connection  with  the  bal- 
lots. I  do  not  by  this  mean  to  argue  in  the  remotest  de- 
gree against  the  propriety  of  legislation  which  insures  to 
the  policy-holder  in  mutual  companies  the  right  to  vote. 
I  take  no  issue  with  the  recommendations  of  the  Arm- 
strong Committee  or  with  the  belief  of  the  Legislature  that 
the  policy-holder  up  to  that  time  had  not  been  sufficiently 
heard.  I  contend  only  for  this:  That  the  issue  was  so 
vast,  the  interests  were  so  great,  that  any  change  from 
what  was  believed  to  be  a  bad  condition  to  what  was 
planned  to  be  a  sound  and  a  safe  condition,  human  nature 
being  what  it  is,  should  have  been  made  in  the  light  of 
experience,  should  have  been  undertaken  less  violently, 


New  York  State  and  Life  Insurance  Legislation    179 

should  have  been  made  so  as  not  to  invite  for  the  policy- 
holders  greater  evils  and  greater  disasters  than  those  from 
which  the  Legislature  believed  it  was  relieving  the  in- 
sured.* 

AGENTS. 

The  legislation  under  this  heading  contains  nothing 
radically  new,  and  nothing  to  which  life  insurance  men 
can  take  serious  exception. 

MISREPRESENTATIONS. 

Section  60  of  the  Insurance  Law  is  an  entirely  new  sec- 
tion. I  don't  think  life  insurance  men  are  disposed  to 
quarrel  with  it,  but  it  should  be  noted  that  all  misrepre- 
sentations of  agents,  officers,  directors,  and  employees,  wil- 
ful or  otherwise,  are  severely  dealt  with,  while  the  repre- 
sentations of  the  applicant  as  to  the  things  upon  which  his 
insurability  depends  are  declared  to  be  not  even  warran- 
ties. Indeed,  under  chapter  324,  the  rule  is  so  severe  that 
if  an  officer  makes  a  statement  to-day  according  to  his 
knowledge  and  belief,  and  to-morrow,  or  next  week  or 
next  year,  finds  that  he  was  mistaken  in  any  particular, 
finds  that  possibly  some  subordinate  officer  in  furnishing 
him  information  made  a  clerical  error,  and  then  finds,  as 
he  may,  that  he  must  make  a  contrary  statement,  perjury 
shall  be  presumptively  established  by  that  fact.  I  sub- 
mit to  any  fair-minded  man  whether  this  kind  of  legisla- 
tion is  likely  to  secure  the  right  type  of  Director,  is  likely 
to  bring  the  right  type  of  man  into  the  business.  Does  it 
represent  a  fair  or  just  theory  of  legislation  ? 

POLICIES. 

I  believe  the  legislation  which  forbids  any  single  com- 
pany to  issue  at  the  same  time  policies  on  the  participating 
and  non-participating  plan  is  bad  legislation.  The  argu- 

•Section  94  was  amended  by  L.  1909,  Chap.  301,  also  by  L.  1910, 
Chap.  697. 


180  Militant  Life  Insurance 

ment  of  the  Armstrong  Committee,  which  I  presume  was 
the  controlling  argument  with  the  Legislature,  was  en- 
tirely unsound,  and  it  was  this:  The  Committee  said  if 
premiums  for  non-participating  insurance  are  fixed  by  a 
mutual  company  at  a  rate  lower  than  the  actual  cost  of 
carrying  the  insurance,  including  a  fair  share  of  expenses, 
it  is  an  imposition  upon  the  other  policy-holders;  if ,  on  the 
other  hand,  premiums  are  charged  at  a  rate  higher  than 
that  demanded  by  the  cost  of  carrying  the  insurance,  the 
excess  is  without  excuse,  and  those  who  take  the  policies 
are  overcharged  and  deprived  of  the  returns  to  which  they 
should  be  entitled.  If  this  argument  is  good  against  non- 
participating  business  by  a  participating  company,  it  is 
good  against  all  non-participating  business.  Under  this 
logic  every  non-participating  rate  is  either  too  high  or  too 
low.  In  fact  the  Committee  said  in  so  many  words  that  a 
non-participating  policy  issued  by  a  mutual  company 
could  be  justified  only  upon  the  supposition  that  the  exact 
results  of  the  business  can  be  foreseen.  Of  course  that  is 
an  impossibility.  But  why  is  it  any  more  improper  for 
participating  policy-holders  in  a  company  to  insure  a 
man's  life  at  a  price  on  which  they  are  safe  and  on  which 
they  may  make  a  slight  profit  than  it  is  for  stock-holders 
to  do  the  same  thing?  Wherein  is  it  inherently  wrong? 
On  the  other  hand  a  life  insurance  company,  so  long  as  it 
does  its  business  honestly  and  openly  and  under  the  super- 
vision of  the  State,  should  offer  any  form  of  policy  which 
may  appeal  to  the  insurant  and  which  will  do  no  one  else 
any  injury. 

Under  this  general  heading  comes  what  are  known  as 
Standard  Policy  Forms.  It  would  be  interesting  to  know 
what  the  Standard  Policy  Forms  would  be  now  if  the  Leg- 
islature had  acted  on  this  subject  fifteen  years  ago.  More 
progress  was  probably  made  in  policy  forms  between  1892 
and  1906  than  in  all  the  previous  history  of  life  insurance. 


New  York  State  and  Life  Insurance  Legislation    181 

The  improvement  was  the  result  of  competition.  Policy 
forms  grew  constantly  better  and  simpler.  Year  by  year 
they  gave  the  policy-holder  more  for  his  money.  On  the 
average,  they  were  the  best  forms  of  insurance  that  had 
ever  been  written,  and,  on  the  average,  they  were  better 
than  the  forms  which  the  State  compels  the  companies  to 
write  to-day.  I  don't  say  that  for  the  purpose  of  condemn- 
ing in  any  degree  the  present  Standard  Forms.  These 
forms  contain  nothing  new,  no  benefit  that  was  not  then 
offered  by  some  company.  They  do  contain  a  combination 
of  nearly  all  the  great  benefits  and  they  shut  out  a 
number  of  inferior  contracts.  It  is  a  vastly  better  con- 
tract than  any  Legislature  would  have  ventured  to  put 
upon  the  statute  books  a  few  years  earlier,  and  the  com- 
panies by  exercising  certain  options  in  the  policy-holder's 
favor,  are  making  it  a  better  contract  than  the  law  re- 
quires. Contrast  this  Standard  Form  with  the  policy 
forms  of  a  generation  ago  and  we  have  a  complete  answer 
to  those  people  who  are  demanding  that  life  insurance 
premiums  shall  be  decreased.  We  still  hear  that  de- 
mand. Here  and  there  a  newspaper  asserts  that  after 
all  the  insurance  investigation  has  failed  and  legisla- 
tion has  failed  because  premiums  have  not  been  lowered 
and  the  cost  of  insurance  to  the  policy-holder  has 
not  been  made  less.  Unfortunately,  neither  competi- 
tion nor  legislation  can  lower  the  death  rate;  they 
cannot  increase  the  rate  at  which  money  can  be  im- 
proved at  compound  interest.  But,  if  a  comparison 
is  made  between  the  average  policy  form  of  a  generation 
ago  and  the  Standard  Form  of  the  State  of  New  York 
in  1907,  it  is  not  difficult  to  show  an  equivalent  for  a  con- 
siderable decrease  in  cost.  This  appears  in  an  increase 
in  benefits  which  has  been  marked,  indeed  almost  startling, 
within  fifteen  years.  It  is  possible  that  premiums  might  be 
reduced  if  the  State  should  compel  all  companies  to 


182  Militant  Life  Insurance 

abandon  the  present  Standard  Form  and  write  contracts 
like  those  issued  twenty  years  ago.  But  a  proposition  to 
that  effect  would  hardly  get  a  decent  hearing.  It  would 
not  get  a  decent  hearing  because  the  public  has  been 
taught  that  the  only  good  insurance  is  insurance  that 
insures.  This  lesson  was  taught  by  the  companies  and 
was  the  product  of  free  competition. 

Briefly  some  of  the  points  on  which  the  policy  con- 
tract has  been  vastly  improved  through  competition  are: 
(1)  change  of  beneficiary,  (2)  grace  in  payment  of  pre- 
miums, (3)  conditions  as  to  travel  and  change  of  resi- 
dence, (4)  occupation,  (5)  suicide,  (6)  incontestability, 
(7)  policy  loans,  (8)  options  on  surrender  or  lapse,  (9) 
modes  of  settlement,  etc. 

Under  the  general  heading  of  policies  I  ought  perhaps 
to  refer  to  the  law  which  forbids  the  further  issue  of  con- 
tracts carrying  deferred  dividends,  but  I  prefer  to  discuss 
that,  not  perhaps  in  its  natural  order  but  in  connection 
with  the  general  subject  of  limitations.* 

DISBURSEMENTS. 

Here  the  Legislature  was  on  relatively  familiar  ground, 
and  its  action  leaves  little  to  criticise. 

VALUATIONS. 

Discussion  of  this  phase  of  the  legislation  belongs 
rather  to  the  Actuarial  Department,  and  as  a  practical  life 
insurance  man  I  pause  only  to  point  out  that  peculiar 
arrangement  under  which  it  is  assumed  that  all  companies 
will  make  a  mortality  saving  on  tabular  rate  of  50%  the 
first  year,  35%  in  the  second  year,  25%  in  the  third  year, 
15%  in  the  fourth  year,  and  5%  in  the  fifth  year.  This 
saving  may  or  may  not  be  realized.  In  some  companies  it 
is,  in  some  companies  it  is  not.  All  companies,  however, 

•Section  101,  Standard  Policy  Forms,  was  amended  by  L.  1909, 
Chap.  301,  substituting  "Standard  Provisions." 


New  York  State  and  Life  Insurance  Legislation    183 

are  permitted  to  expend  the  saving  under  another  section 
of  the  law  which  I  shall  discuss  in  a  moment,  whether 
they  have  realized  it  or  not. 

On  substantially  all  other  points  the  practice  of  all  the 
leading  companies  was  and  is  more  conservative  than  the 
law  in  fixing  liabilities,  and  more  liberal  than  the  law  in 
dealing  with  the  policy-holders. 

SECURITIES. 

I  have  no  fault  to  find  with  the  legislation  on  this 
subject  except  this:  I  don't  believe  the  Legislature  had 
any  right  to  say  that  a  company  holding  securities  legally 
bought  must  sell  those  securities  within  a  given  period  of 
time.  I  can  say  this  all  the  more  feelingly  because  the 
statute  in  question  did  not  in  any  way  affect  the  New- 
York  Life.  I  believe  that  section  of  the  legislation  was 
not  only  wrong  in  principle  but  unconstitutional.* 

PUBLICITY. 

No  intelligent  provision  for  publicity  has  had  or  ever 
will  have  the  opposition  of  any  good  life  insurance  man. 
We  frequently  hear  it  stated  that  there  is  such  a  thing  as 
too  much  publicity,  that  there  are  many  things  about  busi- 
ness and  about  the  management  of  corporations  that  the 
public,  in  the  nature  of  the  case,  cannot  understand.  It 
is  argued  that  people  insured  in  life  companies  and  people 
who  hold  stock  in  various  styles  of  corporations  will  be 
disturbed,  will  act  contrary  to  their  best  interests,  by 
having  information  beyond  a  certain  point.  Personally, 
I  don't  believe  in  any  such  doctrine.  I  think  the  public 
is  disposed  to  forgive  a  good  deal  in  management  pro- 
vided they  believe  that  management  is  not  trying  to  con- 
ceal anything,  provided  they  don't  suspect  there  are 

*Section  100  was  amended  In  1911,  extending  the  time  for  sale  of 
stocks  for  five  years  from  December  31,  1911. 


184  Militant  Life  Insurance 

wheels  within  wheels.  I  believe  that  corporate  manage- 
ment is  much  more  likely  to  err  on  the  side  of  not  giving 
enough  information.  I  have  yet  to  see  any  damage  done 
to  a  life  insurance  corporation,  or  any  other  style  of  cor- 
poration, because  the  directors  and  officers  talked  to  the 
policy-holders  or  the  stockholders  too  frankly,  too  fully, 
or  too  freely.  If,  therefore,  the  laws  of  this  State  have 
failed  to  give  the  policy-holders  or  the  Superintendent  of 
Insurance  the  fullest  authority  to  make  any  proper  in- 
quiry at  any  proper  time,  such  authority  should  be  written 
into  the  statutes  at  once. 

LIMITATIONS. 

When  the  Legislature  took  up  this  topic  in  1906  it  went 
out  into  entirely  new  fields.  It  placed  limitations  first 
upon  the  new  business  a  company  may  do  within  a  year ; 
second,  upon  the  expenses  of  new  business ;  third,  upon  the 
total  expenses  of  a  company ;  and,  fourth,  upon  the  amount 
of  contingency  reserve  or  surplus  which  a  company  may 
hold. 

1.  Limitation  of  new  business. 

This  legislation  was  the  result  of  a  conviction  that  cer- 
tain companies  had  already  become  too  large.  The  Legis- 
lative Committee  gave  this  as  a  reason  for  its  recom- 
mendations. This  was  also  urged  on  the  floor  of  the 
Senate  during  the  debate  which  accompanied  the  passage 
of  the  law,  and  in  the  excitement  and  hysteria  of  that  pe- 
riod a  sentiment  in  support  of  such  an  argument  was 
probably  more  or  less  widely  disseminated.  Let  me  quote 
from  the  Report  of  the  Joint  Committee  of  the  Senate 
and  Assembly  of  the  State  of  New  York,  filed  February 
22,  1906,  language  which  appears  on  page  282 : 

" Their  (the  three  big  New  York  companies')  member- 
ship is  so  large  and  their  resources  are  so  vast  as  to  make 
the  question  of  responsible  control  and  conservative  man- 


New  York  State  and  Life  Insurance  Legislation    185 

agement  one  of  extreme  difficulty,  and  their  magnitude,  if 
permitted  to  grow  unrestrained,  will  soon  become  a  serious 
menace  to  the  community.  ' ' 

Let  us  for  a  moment  consider  that  language.  It  invites 
very  careful  consideration  because  it  explains  the  attitude 
of  this  special  Committee  through  the  entire  period  of  its 
labors  and  locates  the  source  and  the  nature  of  the  im- 
pulse which  found  final  expression  not  only  in  this  par- 
ticular section — 96 — but  in  other  portions  of  our  insur- 
ance laws.  With  perfect  integrity  of  purpose  and  acting 
from  a  patriotic  sense  of  duty,  the  Committee  here 
adopted  what  I  believe  to  be  a  false  philosophy  and 
missed  a  great  opportunity. 

There  are  ideas  and  forces  at  work  in  society  which 
must  be  curbed  and  controlled  and  even  limited.  There 
are  other  ideas  which  must  be  controlled  but  in  the  very 
nature  of  things  should  not  be  limited.  The  life  insurance 
idea  is  almost  wholly  beneficent  in  its  nature.  It  has  no 
part  or  lot  with  the  forces  that  fight  against  the  progress 
of  society.  It  is  arrayed  against  radicalism  and  improvi- 
dence and  war  and  all  the  things  that  destroy.  In  addi- 
tion to  the  highly  beneficent  work  of  distributing  amongst 
the  many  the  shock  and  loss  caused  by  the  death  of  a  few, 
it  accumulates,  if  successful,  great  sums  of  money  which 
are  in  turn  invested  in  the  sound  enterprises  of  the  world 
and  held  for  the  security  of  contracts.  These  accumula- 
tions when  compared  with  the  debts  of  the  world — repre- 
senting war  and  waste — or  with  the  accumulations  repre- 
senting industrial  development,  are  beggarly  in  amount. 
The  world  finds  no  great  difficulty  in  administering  great 
public  debts,  whether  state  or  national.  It  even  entrusts 
the  expenditure  of  almost  unlimited  millions  to  men  who, 
by  the  standards  employed  in  private  business,  are  abso- 
lutely disqualified  for  any  such  service.  Yet,  upon  the 
whole,  we  do  fairly  well,  and  the  man  who  would  dare  to 


186  Militant  Life  Insurance 

stand  in  his  place  and  say  that  we  must  abandon  national 
development  and  national  defence,  that  we  must  abandon 
industrial  development,  because  our  civil  system  has  broken 
down,  because  men  cannot  be  found  sufficiently  able  and 
honest  to  administer  these  large  affairs— would  be  immedi- 
ately rejected  as  a  leader;  he  would  be  condemned  because 
he  had  advanced  the  philosophy  of  despair. 

Yet  here  was  a  group  of  distinguished  citizens  who 
advanced  exactly  this  kind  of  philosophy  when  brought 
face  to  face  with  certain  natural  problems  developed  in 
the  management  of  inherently  beneficent  and  constructive 
institutions.  They  reported  extravagant  commissions,  ex- 
travagant administration,  evidence  of  lobbying,  and  many 
other  things  of  which  they  disapproved  and  which  met 
general  public  reprobation.  But  admit  the  existence  of  all 
the  offences  the  Committee  charged,  and  suppose  that  all 
the  press  imagined  about  the  situation  was  true,  and  sup- 
pose that  more  than  the  Committee  discovered  and  more 
than  the  press  imagined  was  also  true,  even  then  their 
conclusion  as  embodied  in  their  principal  remedy  was  a 
non  sequitur.  It  was  a  colossal  economic  error.  The  remedy 
proposed  bore  no  relation  to  the  offence.  Extravagances 
in  the  name  of  beneficence  have  been  committed  before; 
but  that  is  no  reason  for  condemning  beneficence.  Bad 
practices,  where  methods  should  be  correct  and  scrupu- 
lous, were  not  unprecedented.  Inefficient  men  have  been 
discovered  in  the  service  of  the  noblest  of  human  enter- 
prises. These  conditions  have  always  existed.  They  are 
incidents  which  attach  to  all  endeavor,  developments 
which  must  always  be  guarded  against,  which  go  with  the 
evolution  of  every  complicated  form  of  society.  But  be- 
cause these  conditions  persistently  arise  no  constructive 
statesman  has  suggested  that  limitations  should  be  put 
upon  the  particular  forms  of  activity  to  which  the  evils 
attach.  The  conclusions  of  the  Committee  in  this  particu- 


New  York  State  and  Life  Insurance  Legislation    187 

lar  represent  the  methods  of  the  destructionist  and  not 
those  of  the  reformer. 

If  a  bridge  is  built  in  the  interests  of  public  transpor- 
tation and  the  contractor  and  the  representatives  of  the 
people  build  a  good  bridge, — one  that  serves  a  great  public 
purpose  and  serves  it  well — but  at  the  same  time  conspire 
together  to  rob  the  people,  no  one  ventures  to  suggest  that 
the  proper  way  to  remedy  that  evil  is  to  build  no  more 
bridges.  So  in  this  case — the  thing  itself — lif  e  insurance — 
was  found  to  be  sound  and  effective  and  enormously  use- 
ful. There  was  no  taint  upon  it.  The  State  had  chartered 
the  companies  for  specific  purposes,  and  when  put  to  a 
test  that  was  literally  fearful  in  its  character,  the  com- 
panies were  found  in  every  essential  to  have  been  faithful 
to  the  State  and  faithful  to  their  mission.  The  conclusion 
of  the  Committee  that  the  way  to  cure  excrescences  was 
to  destroy  the  thing  itself,  the  way  to  check  evil  practices 
was  to  limit  the  operation  of  an  institution  which  in  itself 
was  thoroughly  useful  and  desirable,  was  based  on  very 
bad  logic.  I  do  not  believe  the  citizens  of  this  State  were 
willing  then  and  I  do  not  believe  they  are  willing  now 
to  admit  their  inability  to  secure  an  administration  of  life 
insurance  that  is  effective  and  honest,  however  large  the 
companies  may  be.  They  are  no  more  ready  to  admit 
that  than  they  are  to  say  that  New  York  City  is  too 
large  or  that  the  Empire  State  is  too  large.  In  saying 
that  the  companies,  because  of  the  extent  of  their  mem- 
bership and  the  vastness  of  their  resources,  "will  soon 
become  a  menace  to  the  community",  the  Committee,  and 
the  Legislature  which  endorsed  their  recommendations, 
substantially  concluded  that  human  nature  is  so  made  up 
and  society  is  so  constructed  that  we  cannot  handle  things 
on  a  large  scale,  not  even  beneficence.  What  conclusions 
the  Committee  might  have  come  to  and  what  action  the 
Legislature  might  have  taken  if  they  had  been  dealing 


188  Militant  Life  Insurance 

with  other  enterprises  equally  large,  but  in  no  sense 
beneficent,  it  is  useless  now  to  conjecture. 

With  the  utmost  respect  for  the  Committee's  motives, 
with  unlimited  admiration  for  their  industry  and  sin- 
cerity, I  am  obliged  to  deny  the  soundness  of  their  phil- 
osophy and  the  correctness  of  their  conclusion  in  this  mat- 
ter. They  missed  a  great  opportunity.  They  misread  the 
lesson  of  all  modern  development.  They  did  not  see 
that  as  against  the  forces  of  selfishness  and  improvidence 
here  was  a  force  of  wonderful  potency  and  almost  un- 
limited possibilities, — a  force,  too,  which  naturally  fights 
for  all  that  is  best  in  society,  a  force  which  in  the  nature 
of  things  should  have  been  first  purified  and  then  set  free. 

We  administer  the  affairs  of  forty-six  States  better 
than  we  administered  the  affairs  of  thirteen.  We  aban- 
doned fear  of  great  things  and  all  doubt  about  our  ability 
to  handle  great  things  when  we  crossed  the  Mississippi 
River  territorially  a  hundred  years  ago. 

Suppose  the  Committee  had  first  recommended  action 
which  would  have  sternly  purged  the  companies  of  errors, 
ended  extravagances,  and  insured  a  high  standard  of  trus- 
teeship from  Directors,  and  then  in  the  interests  of  society 
generally  had  placed  them  in  the  centre  of  a  blaze  of  pub- 
licity with  a  declaration  which  emphasized  their  useful- 
ness and  especially  the  high  duty  of  those  in  responsible 
places.  This  would  have  condemned  men,  and  would  have 
endorsed  the  thing  itself;  this  would  have  added  to  the 
damnation  of  those  who  had  been  unfaithful,  and  would 
also  have  added  to  the  prestige  of  life  insurance.  But  in 
saying  that  a  beneficent  idea  may  practically  "become  a 
serious  menace  to  the  community"  the  Committee  adopted 
the  philosophy  of  despair.  They  made  a  sort  of  declara- 
tion of  civic  bankruptcy.  They  declared  that  while  poli- 
ticians and  second-rate  men  may  be  trusted  to  administer 
vastly  greater  interests,  men  sufficiently  unselfish  and 


New  York  State  and  Life  Insurance  Legislation    189 

philanthropic  and  faithful  cannot  be  found  to  administer 
the  funds  of  beneficence.* 

2  and  3.  Limitation  of  total  expenses  and  expenses  for 
new  business. 

I  have  been  told  that  this  is  a  subject  I  should  not 
touch.  Just  why  I  don't  know.  I  am  not  opposed  to  a 
limitation  on  what  may  be  spent  in  the  procurement  of 
new  business.  I  am  opposed  to  a  law  under  which  social- 
ism creeps  in  and  while  professing  to  limit  expenses  limits 
methods.  I  am  opposed  to  a  law  which  provides  for  ex- 
penses something  which  may  never  exist  and  practically 
ignores  a  provision  which  exists  in  every  premium  paid 
during  the  lifetime  of  every  insurance  contract.  I  am 
opposed  to  a  law  which,  between  the  limitation  which  it 
fixes  on  cost  of  new  business  and  the  limitation  which  it 
fixes  on  total  expenses  leaves  opportunity  for  endless 
extravagances.  I  am  opposed  to  a  law  which,  taken  with 
other  sections  of  the  Insurance  Law,  absolutely  takes  the 
soul  out  of  organization.  A  real  business  organization  is 
something  organic.  If  it  is  not  organic,  it  is  not  effective. 
An  organism  has  blood  as  well  as  bones.  An  agency  or- 
ganization constructed  under  the  provisions  of  the  exist- 
ing laws  of  this  State  has  and  can  have  only  bones;  it 
has  no  blood.  Under  these  laws,  a  man  who  has  served  a 
company  for  twenty-five  years,  who  has  put  into  the  insti- 
tution his  life,  his  personality,  his  reputation,  everything  he 
has,  has  no  recognition  and  no  return  for  what  he  daily 
renders  beyond  the  man  who  entered  the  Company's  ser- 
vice yesterday  and  who  may  leave  it  to-morrow.  This  is 
a  gross  violation  of  every  principle  on  which  sound  busi- 
ness organization  rests.  An  agency  organization  of  any 
kind  is  made  up  of  men,  made  up  of  very  clever  and 
shrewd  men.  As  a  rule,  they  are  men  who  can  be  ap- 
pealed to  powerfully.  They  are  ambitious  men,  proud 

'Section  96  was  amended  by  L.  1910,  Chap.  697. 


190  Militant  Life  Insurance 

men,  optimistic  men.  They  want  to  make  a  livelihood, 
they  want  to  make  money,  but  they  want  recognition,  too; 
they  want  the  distinction  that  in  every  other  walk  of  life 
goes  with  distinguished  services.  Under  section  97  these 
things  are  denied  them,  not  so  much  because  section  97 
puts  a  limit  on  what  a  company  may  pay,  but  because 
section  97  deals  with  the  method  as  well  as  the  amount 
that  a  company  may  pay.  If  section  97  put  a  limit  on  the 
expenses  of  new  business  but  left  management  the  usual 
discretion  with  regard  to  how  that  expense  should  be  ap- 
plied, there  would  be  little  reason  to  criticise  the  section. 
Here  again  the  Legislature  was  on  entirely  new  ground. 
It  was  dealing  with  something  almost  as  new  as  the  limita- 
tion on  the  amount  of  business  that  a  company  may  do. 
It  did  not  intend  by  this  process  to  decrease  the  amount  of 
business  that  all  New  York  companies  would  do,  but  that 
was  the  effect.  The  Legislature  did  intend,  under  the  ad- 
vice of  its  Investigating  Committee,  to  stop  the  growth  of 
the  three  big  companies  in  New  York  State.  In  that  pur- 
pose I  don't  believe  it  had  the  support  at  that  time  of  any 
large  section  of  public  opinion,  and  I  don't  believe  it  has 
the  support  to-day  of  even  a  small  section  of  public  opin- 
ion. The  Legislature  intended  in  section  97  to  limit  the 
cost  of  new  business.  It  didn't  intend  to  strike  a  para- 
lyzing blow  at  activities  of  all  our  companies.  In  effect, 
this  is  what  it  did. 

There  is  logical  justification  for  the  limitation  of  the 
expenses  of  a  life  insurance  company — aside  from  any  aca- 
demic opinion  to  the  effect  that  expenses  were  or  were  not 
excessive,  or  that  a  company  has  or  has  not  paid  too  much 
for  new  business— and  that  is  in  the  way  the  premium  rates 
of  a  company  are  made  up.  The  State  selects  a  Table  of 
Mortality  and  says  the  company  must  provide  for  a 
mortality  in  accordance  therewith;  it  selects  a  minimum 
rate  of  interest,  and  says  the  company  must  have  enough 


New  York  State  and  Life  Insurance  Legislation    191 

funds  on  hand  to  meet  its  future  liabilities  in  case  it 
earns  only  this  rate  of  interest  on  its  invested  funds; 
but  it  leaves  the  company  to  say  what  amount  it  will  add 
to  the  net  premium  calculated  on  these  assumptions,  for 
expenses  and  contingencies.  The  company  is  at  liberty  to 
make  this  amount  as  much  or  as  little  as  it  chooses.  Hav- 
ing fixed  upon  an  amount  for  this  purpose,  the  State 
would  seem  to  have  a  right  to  forbid  any  expenditure  in 
excess  of  that.  This  would  be  simple  and  fair;  it  would 
appeal  to  the  judgment  of  all  men.  But  the  present 
method  of  fixing  the  cost  of  procuring  and  caring  for  new 
business  item  by  item  is  socialistic,  is  illogical,  is  cumber- 
some, is  vexatious,  is  destructive  of  all  agency  efficiency, 
and  is  totally  without  any  justification  whatever  from  any 
facts  that  ever  existed  in  life  insurance  or  that  now  exist.* 

3.  Limitation  of  contingency  reserve. 

As  this  topic  has  been  discussed  by  the  President  of 
another  company,  I  shall  touch  upon  it  only  briefly.  To 
show  the  profound  wisdom  of  Mr.  Gladstone's  criticism 
as  to  the  difficulty  of  legislating  wisely  when  legislating 
quickly,  we  have  only  to  cite  the  first  recommendation  of 
the  Legislative  Committee  on  the  limitations  of  contin- 
gency reserves.  That  recommendation  would  have  per- 
mitted the  New- York  Life  Insurance  Company  to  accu- 
mulate as  a  contingency  fund  only  2y2%  of  the  net  value 
of  its  then  outstanding  insurance,  and  within  a  few  years 
would  have  reduced  that  contingency  fund  to  2%  of  the 
net  values.  This  recommendation  was  disregarded  by  the 
Legislature  sufficiently  to  fix  this  contingency  reserve  for 
the  large  companies  at  5%.  The  decline  in  bonds  and 
stocks  held  by  the  Mutual  Life  and  the  Equitable  plus 
the  decline  in  bonds  held  by  the  New- York  Life  between 
December  31,  1906,  and  November  1,  1907,  was  over 


'Section  97  was  amended  by  L.   1909,   Chap.   301,  and  by  L.   1910, 
Chap.  697. 


192  Militant  Life  Insurance 

$73,000,000.  This  was  8y2%  of  their  market  value,  and 
over  6%  of  the  entire  reserve  liabilities  of  the  companies. 
I  assume  that  the  next  Legislature  will  not  hesitate  long 
over  this  section  of  the  law.  Fortunately,  before  any  com- 
pany was  obliged  to  pay  out  money  under  this  provision 
of  the  law,  the  operation  of  natural  laws  demonstrated 
not  only  the  needlessness  but  the  danger  of  section  87.  In 
the  light  of  present  conditions,  large  margins  over  the 
mathematical  reserves  of  the  companies,  especially  where 
those  reserves  themselves  are  large,  do  not  appear  to  be 
so  much  a  public  menace  as  they  did  two  years  ago.  In- 
deed, the  movement  downward  in  the  value  of  securities 
has  been  so  severe  that  the  danger  now  seems  to  be  from 
panicky  action  taken  at  the  other  extreme.  The  Commis- 
sioners of  a  number  of  States  recently  met  and  decided 
that  in  making  up  their  Balance  Sheets  the  companies 
may  use  market  values  of  Stocks  and  Bonds  as  they  ap- 
peared at  the  end  of  1906.  Another  movement  has  been 
inaugurated,  which  has  gained  some  headway,  demand- 
ing that  not  only  life  insurance  companies  but  other  finan- 
cial institutions  make  up  their  Balance  Sheets  at  the 
end  of  this  year,  entering  all  bonds  on  which  interest  is 
not  in  default  and  on  which  the  principal  is  well  secured 
at  cost  value  increased  or  decreased  by  amortization.  The 
practical  and  conservative  life  insurance  man  may  well  cry 
out,  "A  plague  o'  both  your  houses".  Deliver  us,  on  the 
one  hand,  from  bad  legislation;  deliver  ms,  on  the  other, 
from  Balance  Sheets  which  are  mild  declarations  of  insol- 
vency. Balance  Sheets  should  be  made  up  on  market 
values.  Market  values  should  not  be  taken  at  any  instant, 
but  they  should  be,  as  the  decisions  of  the  Courts  in  many 
States  have  held,  "fair"  or  "average"  or  "normal" 
values,  values  that  could  be  realized  during  the  period  of 
time  which  would  probably  attend  actual  liquidation  of 
a  company's  assets. 


New  York  State  and  Life  Insurance  Legislation    193 

It  is  pertinent  to  observe  just  at  this  point  that  the 
enactments  of  the  Legislature  of  1906  in  this  State  record 
the  first  attempt  by  the  State  to  discourage  conservatism 
in  management.  These  laws  limit  the  amount  of  business 
that  a  company  may  do,  compel  annual  distribution  of 
surplus,  compel  this  distribution  to  be  so  made  as  to  leave 
margins  of  safety  which  in  the  light  of  existing  conditions 
all  men  admit  are  insufficient,  permit  a  departure  from 
the  long-accepted  standards  of  calculating  a  company's 
liabilities  during  the  earlier  years  of  its  policies,  and 
generally  reverse  all  previous  theories  of  legislation  and 
run  counter  to  the  conviction  that  has  heretofore  con- 
trolled sound  life  insurance  management  everywhere.  It 
is  strongly  to  be  hoped  that  in  the  present  critical  condi- 
tion of  security  values  no  management  will  take  a  position 
which  is  in  harmony  with  this  tendency.* 


Another  subject  on  which  I  wish  to  offer  a  word  under 
this  general  heading,  because  it  seems  to  belong  here, 
is  the  effect  had  on  the  writing  of  insurance  on  sub- 
standard lives  by  the  section  of  the  law  which  prohibits 
the  further  issue  of  business  with  deferred  dividends. 

I  maintain  that  the  greatest  achievement  amongst  all 
the  great  achievements  in  life  insurance  between  1892  and 
1906  was  the  development  and  perfection  of  plants  by 
which  insurance  was  freely  offered  on  impaired  lives. 
Time  doesn't  permit  me  to  dwell  upon  the  benefits  to  the 
public,  to  the  companies,  and  to  their  agency  organiza- 
tions of  business  of  this  kind.  It  was  a  distinct  achieve- 
ment. It  was  like  a  new  discovery  in  science,  or  an  im- 
proved method  in  manufacturing  by  which  waste  products 
are  utilized.  It  brought  life  insurance  in  a  perfectly 
sound  form  to  thousands  of  men  who  needed  it  most,  who 

*Section  18  was  amended  by  L.  1909,  Chap.  301  and  by  L.  1910, 
Chap.  634. 


194  Militant  Life  Insurance 

desired  it  profoundly,  and  who  could  not  buy  it  at  any 
price. 

Neither  can  I  stop  to  explain  in  detail  why  this  business 
was  seriously  crippled,  indeed  made  relatively  of  little 
use,  by  the  discontinuance  of  insurance  on  the  deferred 
dividend  plan.  Such,  however,  is  the  fact.  But  let  me 
show  you  in  a  word  what  has  been  done  by  the  New-York 
Life  Insurance  Company  alone  in  this  field  of  labor.  In 
1896  that  Company  placed  on  its  books  1,000  policies  in- 
volving $1,500,000  insurance;  in  1897,  1,900  policies  for 
$2,500,000  insurance ;  in  1898,  4,500  policies  for  $6,600,000 
insurance;  in  1899,  9,700  policies  for  $16,800,000  insur- 
ance; and  so  on  until  in  1904  it  wrote  policies  on  25,500 
sub-standard  lives  for  $35,200,000  insurance.  From  that 
date  down  to  the  close  of  1906  about  the  same  proportion 
of  sub-standard  business  was  done.  At  the  close  of  1906 
that  Company  had  130,400  sub-standard  policies  in  force 
carrying  $228,253,000  insurance.  It  had  paid  over  $10,- 
000,000  in  death-claims  under  this  style  of  insurance,  and 
its  ratio  of  mortality  was  95%  of  what  it  had  anticipated. 
Of  course  the  Legislative  Committee  had  no  thought  or 
desire  which  would  naturally  or  directly  lead  to  the  prac- 
tical destruction  of  such  a  useful  plant.  Yet  there  is 
hardly  any  phase  of  insurance  as  offered  by  the  New  York 
companies  at  the  close  of  1906,  and  no  phase  of  the  work 
of  the  New- York  Life,  which  was  so  directly  and  so  im- 
mediately affected  by  the  legislation  of  that  year. 

The  primary  functions  of  the  State  with  respect  to  life 
insurance  are,  first,  to  make  it  safe;  second,  to  make  it 
honest;  and,  third,  so  far  as  the  State  can,  to  make  it  use- 
ful. The  most  important  of  these,  of  course,  is  the  first. 
Life  insurance  had  better  not  be  than  to  be  unsafe.  It 
had  better  be  sound  and  dishonest  than  immaculate  and 
impotent.  Whether  or  not  life  insurance  is  useful  de- 
pends on  whether  or  not  it  is  successful,  and  that  in  turn 


New  York  State  and  Life  Insurance  Legislation    195 

depends  on  men.  On  the  first  two  points  the  State  is  all 
powerful;  on  the  third  it  can  do  little,  unless  it  is  pre- 
pared to  become  entirely  socialistic  and  undertake  all  the 
guarantees  which  the  companies  now  carry. 

Two  years  ago  the  New  York  companies  occupied  a 
commanding  position  in  the  life  insurance  world.  They 
had  not  only  insured  the  citizens  of  their  own  State,  but 
they  had  gone  into  every  State  in  the  Union  and  into  every 
civilized  country  in  the  world.  It  was  both  a  tribute  to 
the  companies  and  a  high  compliment  to  the  estimate  in 
which  the  commercial  world  held  the  wisdom,  the  sanity, 
and  the  justice  of  the  law-making  body  of  this  State  that 
corporations  under  its  control  could  thus  command  the 
confidence  of  the  business  men  of  all  nations.  This  consti- 
tuted a  trust  which  was  in  the  hands  of  the  Legislature  of 
the  State.  What  the  Legislature  might  do  concerned  not 
merely  the  people  of  New  York  State  but  thousands  of 
people  attached  to  every  race  and  every  speech  and  every 
government.  The  condition  made  it  imperative  that  the 
law-making  body  of  this  State  should  know  that  compa- 
nies bearing  charters  from  New  York  were  sound  and 
honest.  It  made  it  imperative  that  action  should  be  taken 
slowly.  It  made  it  certain  that  legislating  quickly  meant 
legislating  unwisely. 

We  have  better  knowledge  now  of  life  insurance  and  of 
the  companies  chartered  by  this  State.  Time  has  pointed 
out  some  of  the  errors  made  by  the  Legislative  Committee 
and  some  of  the  errors  made  by  the  Legislature.  They  are 
such  errors  as  have  always  been  made  by  honest  men  seek- 
ing reform.  They  are  errors,  however,  which  to  a  con- 
siderable degree  can  be  remedied,  and  a  remedy  is  de- 
manded by  the  imperial  position  of  this  State,  by  the  in- 
terests of  the  citizens  of  the  State,  by  the  existing  obliga- 
tions of  the  citizens  of  the  State  to  the  citizenship  of  the 
world. 


196  Militant  Life  Insurance 

Repeal  no  law  which  makes  the  companies  sound;  re- 
peal no  law  which  makes  the  companies  honest ;  repeal  no 
law  which  demands  the  fullest  and  the  most  exacting 
publicity. 

Amend  the  laws  where  the  State  has  done  partly  well 
and  partly  ill.  Amend  section  97.  Amend  section  83  so  as 
to  restore  every  sound  facility  for  the  issue  of  insurance 
on  impaired  lives. 

But,  in  some  cases,  amendment  is  not  enough.  Justice 
and  sound  public  policy  demand  that  certain  sections  be 
obliterated  from  the  statute  books.  Repeal  that  section 
which  suggests  that  the  officers  of  the  life  insurance  com- 
panies chartered  by  New  York  State  are  more  likely  to  be 
criminals  than  other  men  are, — the  section  which  provides 
that  any  infraction  of  any  portion  of  the  insurance  law 
shall  be  a  misdemeanor.  Wipe  out  that  gross  reflection. 
Repeal  that  section  which  in  a  few  years  may  involve  the 
financial  integrity  of  the  companies  and  the  good  name  of 
the  State.  And  because  it  is  the  product  of  false  philos- 
ophy, because  it  misrepresents  American  capacity  and 
American  ideas,  repeal  that  section  which  limits  the 
growth  of  beneficent  institutions,  which  says  that  men 
cannot  be  found  big  enough  and  honest  enough  to  manage 
corporations  which  express  the  spirit  of  the  age  and  the 
methods  of  the  age. 


LIFE  INSURANCE 
IN  ITS  RELATIONS  TO  SOCIOLOGY 


AN  AUDBK88  BEKOBE  A  CLASS  AT  YALE  UNIVEHSITT, 
WEDNESDAY,  FEBBXJABT  6,  1908 


;N  order  that  we  may  see  clearly  what  the 
relations  of  Life  Insurance  to  Sociology 
are,  it  will  be  necessary  to  set  up  before 
our  eyes  a  part  of  the  frame-work  of 
Sociology  and  to  call  to  mind  certain  of 
its  precepts.  In  doing  this  I  shall  use  an 
adaptation  of  the  language  of  one  of  the 
most  prolific  writers  on  the  subject,  Mr. 
Herbert  Spencer. 

Sociology  is  declared  to  be  the  "  science  of  society,  or 
the  science  of  social  phenomena".  To  the  layman  the 
word  " science"  conveys  the  idea  of  exact  processes,  and 
it  would  not  be  difficult  to  conclude  that  by  this  standard 
there  is  no  such  science  as  Sociology.  Social  phenomena, 
even  to  the  student  of  some  attainments,  seem  at  first  to 
be  almost  without  any  exact  processes,  governed  by  almost 
no  laws.  And  yet,  beneath  the  structure  of  society  as  we 
see  it  to-day,  there  are  some  well-established  laws,  al- 
though the  processes  of  society  are  still  constantly  shift- 
ing, and  many  of  the  institutions  of  society,  such  as  gov- 

197 


198  Militant  Life  Insurance 

eminent,  constitutions  on  which  governments  rest,  and 
statute  law,  are  constantly  changing. 

To  get  a  view  of  the  science  of  Sociology  as  a  whole  we 
must  take  account  of  three  things,  (1)  the  structure  of 
society  and  its  subordinate  structures,  (2)  the  functions 
of  these  various  structures,  and  (3)  the  purpose  and  mean- 
ing of  both. 

Society  is  an  organism,  but  it  differs  in  some  important 
respects  from  a  living  organism.  In  society,  as  in  the  liv- 
ing organism,  there  is  an  increase  of  structure  and  of 
function  with  growth ;  the  activities  of  the  different  parts 
are  so  related  to  one  another  as  to  cause  mutual  de- 
pendence ;  there  is  an  increasing  disability  of  each  part  to 
perform  the  functions  of  other  parts;  an  injury  to  any 
part  becomes  an  injury  to  all;  and  a  benefit  to  any  part 
a  benefit  to  all.  In  the  living  organism  consciousness  is 
concentrated  in  a  small  part  of  the  aggregate;  in  the 
social  organism  it  is  diffused  and  all  the  units  possess 
capacity  for  happiness  and  misery.  Society,  in  other 
words,  exists  for  the  benefit  of  its  members,  and  not  its 
members  for  the  benefit  of  society.  Study  of  the  Sociology 
of  Japan  might  make  it  necessary  to  modify  this  state- 
ment, because  apparently  in  their  social  plan,  if  they  can 
be  said  to  have  a  plan,  all  the  units  exist  for  the  benefit 
of  the  State  and  not  the  State  for  the  benefit  of  the  units. 

Like  the  individual  organism  society  has  three  subordi- 
nate systems,  namely,  the  sustaining  system,  the  distrib- 
uting system,  and  the  regulating  system.  The  sustaining 
system  is  that  upon  which  all  depends,  as  without  it  the 
organism  perishes.  But,  on  the  other  hand,  neither  in  an 
animal  nor  in  society  can  development  of  the  sustaining 
system  or  of  the  regulating  system  go  on  without  corre- 
sponding development  of  the  distributing  system.  The  im- 
portance of  the  last — the  distributing  system, — I  shall 
emphasize  later  on. 


Life  Insurance  in  its  Relations  to  Sociology       199 

The  family  is,  of  course,  at  the  foundation  of  all  so- 
ciety, but  until  moral  consciousness  and  the  sex  relations 
which  we  call  monogamous  were  developed,  there  was  and 
there  could  be,  properly  speaking,  no  such  thing  as  the 
family,  as  the  social  unit.  Under  promiscuity,  or  poly- 
andry, or  polygyny,  there  was  an  absence  of  those  exact 
processes  which  seem  to  be  essential  in  organic  develop- 
ment. With  monogamy  came  a  more  definite  status,  not 
only  to  the  family,  but  to  its  members.  Women  quickly 
attained  a  position  which  made  them  more  dependent 
and  at  the  same  time  more  important  in  the  social  plan. 
Children  took  on  a  new  relation,  and  their  lot,  together 
with  that  of  the  aged,  was  not  determined  according  to 
the  exigencies  of  the  case,  but  by  the  promptings  of  af- 
fection and  a  sense  of  responsibility.  The  playful  sugges- 
tion of  a  distinguished  physician  that  people  who  are  no 
longer  useful  should  be  put  out  of  the  way  is,  after  all, 
only  a  proposed  revival  of  what  was  once  a  grim  reality. 
As  parental  care  has  become  more  elaborate  and  pro- 
longed, as  the  reciprocal  solicitude  of  child  and  parent  has 
grown  up,  the  social  machine  has  become  more  complex, 
Under  the  regime  of  the  family  every  species  must  fulfil 
two  conflicting  requirements :  during  a  certain  period  each 
member  must  receive  benefits  in  proportion  to  its  inca- 
pacity, after  that  period  it  must  receive  benefits  in  pro- 
portion to  its  capacity.  The  law  that  the  least  worthy 
shall  receive  the  most  aid  is  essential  for  the  immature. 
The  species  would  disappear  if  parents  did  not  conform  to 
it.  The  opposite  law  has  been  held  to  be  necessary  for  the 
maintenance  of  general  society;  but  the  most  advanced 
forms  of  society  are  more  and  more  recognizing  an  obli- 
gation to  the  dependent  classes,  which  are  constantly 
added  to  both  in  extent  and  in  number  as  the  structure 
of  society  increases  in  complexity. 


200  Militant  Life  Insurance 

Whatever  has  been  achieved  in  society  has  been  the 
result  of  two  forces :  co-operation  and  conflict.  Sometimes 
men  have  worked  together,  and  sometimes  they  have 
fought.  Both  co-operation  and  conflict,  which  began  be- 
tween individuals,  have  been  carried  on  by  families,  clans, 
tribes,  and  nations,  and  have  been  extended  to  the  sub-divi- 
sions and  sub-structures  of  society.  They  have  included  the 
rulers  and  the  ruled,  and  have  influenced  the  development 
of  industries,  education,  governments  and  religions.  Con- 
flict has  not  been  an  unmixed  evil.  It  has  caused  conten- 
tion between  worse  and  better  tendencies,  methods,  and 
purposes.  It  has  broken  down  useless  barriers.  It  has 
built  up  new  barriers  against  demonstrated  evils.  It  has 
repressed  and  stamped  out  what  was  sinister  and  abhor- 
rent. It  has  opened  the  way  for  larger  and  better  co- 
operation. But  it  has  been  infinitely  cruel  and  infinitely 
wasteful. 

Co-operation  implies  organization,  and  at  first  conveys 
the  impression  of  an  absence  of  conflict.  By  a  strange  law, 
however,  conflicts  which  are  as  cruel  and  as  wasteful  as 
the  conflict  we  have  in  mind  when  we  speak  of  the  strug- 
gle for  existence  have  grown  out  of  co-operation.  With  a 
division  of  labor,  which  began  early,  men  specialized. 
Each  did  that  particular  work  in  industrial  society  for 
which  he  seemed  best  adapted.  Men  doing  the  same  work 
were  naturally  drawn  to  each  other.  They  recognized 
after  a  little  that  other  men  doing  some  special  thing 
would  infringe  on  their  rights  unless  they  organized  them- 
selves for  mutual  protection ;  and  so  sprang  up  the  various 
trades,  then  guilds  were  organized,  and  the  conflicts  began 
which  have  continued  through  all  history  and  find  a  place 
in  the  contests  that  are  on  to-day  between  organized  labor 
and  organized  capital.  Here  again,  out  of  the  complexity 
of  the  social  organization,  grew  a  condition  which  ulti- 
mately added  largely  to  the  dependent  class.  With  labor 


Life  Insurance  in  its  Relations  to  Sociology      201 

specialized  and  highly  organized,  with  men  taught  to  do 
not  many  things — as  men  did  in  the  primitive  form  of 
society — but  only  one  thing,  or  a  part  of  one  thing,  a 
social  or  industrial  upheaval  resulting  in  the  paralysis 
of  the  machinery  of  society  was  inevitably  followed  by 
large  additions  to  the  class  which  is  relatively  incompe- 
tent, and  a  corresponding  increase  in  the  burdens  on  gen- 
eral society. 

It  is  obvious,  therefore,  that  there  has  been  a  dependent 
class  from  the  beginning.  It  existed  as  soon  as  there  was 
anything  like  moral  consciousness  in  sex  relations,  in 
the  family,  and  it  existed  in  society  at  large  as  soon  as 
there  was  a  division  of  labor.  What  the  family  undertook 
to  do  from  the  beginning  in  care  for  the  immature,  recipro- 
cated later  on  by  the  care  of  children  for  aged  parents, 
society  has  done  unwillingly  and  haltingly.  Crude  systems 
of  relief,  both  public  and  private,  are  as  old  as  history.  It 
was  a  long  time  before  any  one  perceived  that  the  sub- 
ject could  be  put  on  a  scientific  basis,  and  the  application  of 
that  discovery  to  social  needs  has  always  been  imperfect 
and  grudging.  The  first  step,  like  the  first  step  toward  the 
establishment  of  any  exact  science,  was  the  discovery  of 
law.  It  had  probably  always  been  noted  that  the  mortality 
among  children  was  greater  than  among  adults,  and 
greater  among  the  aged  than  among  those  in  middle  life, 
but  in  1693  Dr.  Edmund  Halley  discovered  that  there  is 
a  law  governing  longevity.  From  a  careful  study  of  the 
burial  registers  of  the  town  of  Breslau,  in  Silesia,  he  found 
indications  that  every  age  has  its  death  rate,  and  subse- 
quent investigations  have  proved  the  theory  true.  To  be 
sure,  there  are  now  many  mortality  tables,  no  two  of 
which  exactly  agree,  but  nevertheless  the  principle  of  a 
steadily  progressing  death  rate  among  men  after  they 
reach  maturity  is  established.  This  discovery  laid  the 
foundation  of  a  new  social  process.  From  it  sprang  the 


202  Militant  Life  Insurance 

idea  which  has  developed  into  that  great  modern  structure 
which  we  call  Life  Insurance. 

The  law  of  the  termination  of  life,  which  was  now 
found  to  be  as  certain  as  laws  governing  the  beginning  of 
life,  the  sustaining  of  life  and  the  regulation  of  life,  may  be 
regarded  either  as  a  law  of  longevity  or  as  a  law  of  mor- 
tality. Regarded  as  a  law  of  mortality  it  shows  man's 
danger ;  regarded  as  a  law  of  longevity  it  shows  how  man 
may  protect  his  family  and  estate  against  that  danger. 
Men  were  slow  to  recognize  how  this  law  could  be  applied 
and  what  possibilities  it  involved. 

That  children  must  be  educated,  if  society  was  to  be 
maintained,  was  long  ago  recognized.  Acting  through  the 
regulative  system,  men  decreed  that  education  was  so  im- 
portant that  it  must  be  made  a  charge  on  general  society ; 
it  could  not  be  left  to  the  caprice  or  incapacity  of  parents. 
Laws  were  therefore  enacted  compelling  the  attendance  at 
school  of  children  within  certain  ages,  and  making  pro- 
vision for  such  children  at  the  public  charge  when  neces- 
sary. This  takes  on  a  suggestion  of  charity,  which  to 
many  people  has  seemed  offensive  and  to  others  has  seemed 
unfair;  but  the  implication  of  charity  has  disappeared  in 
the  general  mind  and  the  sentiment  is  now  almost  univer- 
sal that  this  is  a  just  and  proper  function  of  the  State. 
But  for  those  other  dependents  who  are  the  product  of 
increasing  age,  of  ill  health  or  industrial  upheavals,  of 
disease,  and  of  general  misfortune,  the  State  has  made 
grudging  and  imperfect  provision.  Such  provision  prob- 
ably always  will  be  imperfect.  The  solution  of  the  prob- 
lem lies  in  the  introduction  of  a  scientific  process  which 
will  decrease  the  dependent  class  and  will  provide  for  it  in 
a  manner  which  involves  no  charity  and  no  humiliation. 

The  first  attempt  to  apply  the  discovery  of  Dr.  Halley 
to  the  mitigation  of  these  conditions  was  in  the  organiza- 
tion of  the  Equitable  Society  for  the  Assurance  of  Life 


Life  Insurance  in  its  Relations  to  Sociology       203 

and  Survivorships  in  1762,  three-fourths  of  a  century  after 
the  Breslau  tables  were  compiled.  During  the  one  hun- 
dred and  fifty  years  following  their  compilation  the 
growth  of  the  idea  and  the  application  of  the  principle 
was  very  slow.  There  was  no  comprehensive  attempt  to 
give  this  discovery  its  natural  place  in  the  social  process 
until  about  1843;  and,  until  about  fifty  years  ago,  there 
was  no  recognition  of  the  fact  that  it  could  not  be  made 
an  effective  part  of  the  social  machine  without  the  crea- 
tion of  an  organization  which  corresponds  to  the  distribu- 
ting system  in  general  society. 

Life  Insurance  is  a  new  social  process  based  upon  law, 
a  basic  law  which  is  certain  and  dependable.  The  dis- 
covery of  social  laws,  so  far  as  such  laws  have  been  dis- 
covered, has  usually  been  made  only  after  conflict  and 
waste.  They  are  indeed  the  survival  of  the  fittest  ten- 
dencies, and  are  not  exact  in  their  working  or  results. 
They  are  frequently  the  outworking  of  individual  interest 
and  brute  force,  modified  by  a  varying  sentiment  of  mo- 
rality and  justice.  The  co-operating  factors,  such  as  cap- 
ital and  labor  in  the  industrial  processes,  are  usually  more 
or  less  at  odds  as  to  the  proper  bases  of  co-operation,  and 
there  is  no  method  of  measuring  the  value  which  each  co- 
operator  contributes,  or  the  share  which  he  should  re- 
ceive. What  should  be  a  fundamental  factor  in  all  co- 
operation, namely,  a  practical  equality  of  interest,  has 
usually  been  lacking.  Even  those  great  political  struc- 
tures, the  unwritten  Constitution  of  England  and  the 
written  Constitution  of  the  United  States,  which  are 
expressions  of  the  principles  of  free  government  as  nearly 
perfect  as  the  wisdom  of  the  ages  has  been  able  to  dis- 
cover, deal  only  with  the  negative  side  of  life.  They 
only  give  opportunity  for  social  processes  which  have 
a  moral  quality,  which  take  account  of  the  future,  which 
provide  for  the  continuity  and  betterment  of  the  race. 


204  Militant  Life  Insurance 

Life  Insurance,  on  the  other  hand,  introduces  a  co-opera- 
tion that  is  more  scientific,  more  far-reaching,  and  has 
a  higher  ethical  quality  than  anything  that  has  ever  been 
incorporated  in  any  written  constitution  or  in  any  body 
of  political  precepts. 

As  a  factor  in  Sociology  Life  Insurance  has  recently 
reached  a  crisis  in  its  development  and  in  its  usefulness. 
While  the  discovery  that  each  age  has  its  own  longevity 
was  made  more  than  two  hundred  years  ago,  society  did 
not  develop  to  the  point  where  it  made  vigorous  and  ef- 
fective application  of  the  idea  until  the  latter  half  of  the 
nineteenth  century.  It  is  not  easy  to  explain  this  slow 
development.  Was  it  the  inertia  of  men,  or  a  lack  of 
moral  perception,  or  a  lack  of  responsibility,  or  a  general 
inability  to  understand  that  a  new  social  process  had  been 
discovered?  Or,  was  it  all  combined?  It  is  undeniably 
true  that  of  the  three  great  systems — the  sustaining,  the 
distributing,  and  the  regulating, — the  distributing  has  de- 
veloped most  slowly,  and  the  development  of  this  system 
has  been  the  most  striking  phenomenon  in  all  recent  social 
progress.  Think  for  a  moment  what  the  development  of 
this  system  comprehends:  It  includes  transportation, 
which  we  all  recognize  as  being  second  in  importance  only 
to  production;  it  includes  all  the  activities  of  trade;  it 
includes  the  services  of  the  telegraph  and  the  telephone. 
Through  these  agencies,  which  we  may  call  the  servants  of 
the  distributing  system,  society  has  with  renewed  courage, 
and  with  great  rapidity  erected  its  fabric, — vast  geograph- 
ically, vast  in  its  power,  vast  in  its  possibilities.  But  the 
most  striking  sociological  fact  in  our  recent  development 
is  that  the  distributing  system  has  come  into  conflict  with 
the  limitations  of  written  Constitutions.  'Sociologically 
the  Nation,  although  it  now  occupies  the  heart  of  a  Con- 
tinent and  faces  two  great  oceans,  is  more  compact  than 
were  the  Thirteen  Colonies  when  the  Constitution  of  the 


Life  Insurance  in  its  Relations  to  Sociology      205 

United  States  was  adopted;  governmentally  it  has  forty- 
six  frontiers  with  which  the  distributing  system  has  to 
reckon.  Conflict  is  coming,  indeed  is  already  on.  The 
serious  conflict  with  which  Life  Insurance  is  faced,  and 
of  which  I  shall  speak  in  a  moment,  is  really  a  part  of 
this  conflict. 

Something  like  fifty  years  ago  certain  men,  with  the 
genius  of  leadership,  recognizing  the  service  that  Life  In- 
surance was  calculated  to  render  to  society,  and  recogniz- 
ing that  an  adequate  distributing  system  was  necessary  to 
its  development,  undertook  to  adjust  to  society  the  scien- 
tific Life  Insurance  made  possible  by  Halley's  discovery. 
They  effected  that  adjustment  by  the  creation  of  an 
efficient  system  of  distribution.  That  is  to  say,  they 
proceeded  to  extend  the  operations  of  Life  Insurance 
through  bodies  of  trained  representatives,  through  what 
is  known  as  agency  organization. 

Let  us  consider  briefly  just  here  how  the  Life  Insurance 
idea  worked  in  conjunction  with  other  structures  and 
methods  of  the  social  organism  until  it  reached  the  point 
of  crisis  to  which  I  have  referred.  It  found  itself  in  har- 
mony with  substantially  every  other  social  structure,  and 
it  used  conditions  as  it  found  them.  It  used  the  legal  pro- 
fession in  its  organization,  in  corporate  operations ;  it  used 
the  medical  profession  in  its  selection  of  members ;  in  the 
creation  of  its  distributing  system,  it  used  the  printing 
press,  the  mails,  the  telephone,  the  telegraph,  and  organi- 
zations of  men  corresponding  to  the  organizations  which 
exist  in  every  type  of  business.  It  used  financial  organiza- 
tions in  the  collection  and  transmission  of  funds ;  mercan- 
tile methods  in  accounting  for  them  and  in  their  safe  keep- 
ing ;  it  used  investment  methods  to  secure  an  income  from 
its  accumulated  funds;  banking  methods  in  distributing 
funds;  it  took  up  a  legal  domicile  and  subjected  itself  to 
the  regulating  system  of  society  wherever  it  went.  It 


206  MUitant  Life  Insurance 

flourished  mightily;  and  there  seemed  no  natural  point  of 
conflict  between  it  and  any  phase  of  the  three  great  sys- 
tems in  society.  But,  almost  from  the  beginning,  there 
was  a  species  of  conflict  between  Life  Insurance  and  the 
regulative  system,  otherwise  known  as  the  State.  Of 
course  the  State  isn't  in  any  business  that  conflicts  with 
Life  Insurance.  On  the  contrary,  Life  Insurance  co-oper- 
ates with  the  State  more  effectually  than  almost  any  other 
form  of  business  organization.  It  not  only  provides  for 
dependents  but  it  prevents  an  increase  in  the  dependent 
class.  It  elevates  the  standard  of  ctizenship,  and  it  makes 
available  for  State,  municipal  and  industrial  progress  the 
small  savings  of  large  numbers  of  people.  The  State  and 
Life  Insurance  are  at  one  in  the  purpose  to  make  its  bene- 
fits sure  and  available  to  as  many  people  as  possible.  Nev- 
ertheless the  State  has  more  and  more  treated  Life  Insur- 
ance as  a  thing  to  be  discouraged.  It  has  for  years  in- 
creased its  normal  cost  by  taxation,  and  within  two  years 
the  State  of  New  York  has  advanced  the  almost  unprece- 
dented doctrine  that  organizations  beneficent  in  their 
character  and  their  purpose  can,  and  indeed  already  have 
become  a  menace  to  the  State  because  of  the  success  they 
have  achieved  and  the  consequent  size  which  they  have 
attained. 

The  strange,  un-American  and  economically  unsound 
doctrine  advanced  by  the  State  of  New  York,  and  legisla- 
tion based  on  this  doctrine,  have  brought  Life  Insurance 
as  a  factor  in  Sociology  to  a  period  of  crisis. 

New  York  has  put  an  arbitrary  limitation  on  the  cost  of 
new  business,  on  the  total  cost  of  administration,  on  the 
amount  of  new  business  a  company  may  do,  on  the  amount 
of  surplus  reserves  it  may  hold.  Wisconsin  has  fixed  a 
maximum  premium  a  company  may  charge.  Missouri  has 
placed  a  limit  upon  the  amount  of  salary  which  may  be 


Life  Insurance  in  its  Relations  to  Sociology       207 

paid  to  an  officer  of  a  company.*  Texas  has  declared  not 
only  what  securities  a  company  may  purchase,  but  what  it 
must  purchase  if  it  does  business  in  Texas.  In  a  consid- 
erable number  of  the  States  Life  Insurance  has  been  de- 
nied the  protection  of  the  Federal  Courts,  and  the  Consti- 
tution of  the  United  States  to  that  extent  has  been  nulli- 
fied. These  enactments  by  the  regulative  system  of  the 
State  are,  in  nearly  every  instance,  unprecedented  and 
revolutionary.  They  inject  a  new  type  of  conflict  into 
the  social  process.  They  all  interfere  directly  with  the 
development  of  the  distributing  system  of  Life  Insur- 
ance ;  they  are  all  reactionary,  f 

This  conflict  is  not  only  unnecessary  but  unnatural. 
It  is  clear  that  an  organization  which  is  in  harmony  with 
the  individual  units  of  society,  and  with  all  the  other 
interests  of  society,  organized  or  unorganized,  must  be  in 
harmony  with  society  as  a  whole.  In  the  earlier  devel- 
opment of  society  it  was  not  unusual  to  find  what 
amounted  to  a  confession  that  the  State  was  unable  to 
regulate,  and  therefore  must  exercise  its  power  to  de- 
stroy, but  such  a  declaration  by  any  body  of  men  living 
under  the  Constitution  of  the  United  States  is  more  than 
startling,  it  is  amazing.  Such  a  doctrine  was  advanced 
and  abandoned  more  than  three  hundred  years  ago.  I 
doubt  if  the  legislators  who  enacted  the  insurance  laws 
of  New  York  State  in  1906  ever  heard  that  a  statute  was 
passed  in  the  reign  of  Elizabeth  declaring  that  the  City  of 
London  had  become  so  large  that  ''such  multitudes  could 
hardly  be  governed  by  ordinary  justice  to  serve  God  and 
obey  her  Majesty",  and  that  in  1581  a  proclamation  was 
actually  issued  forbidding  any  new  buildings.  It  goes 
without  saying  that  society  even  then  quickly  became 


*This  law  was  repealed  in  1911. 

+  See  foot  notes  on   "New  York   State  and  Life  Insurance  Legis- 
lation." 


208  Militant  Life  Insurance 

ashamed  of  such  confessions  of  incompetence,  and  it  seems 
fair  to  infer  that  New  York  State  will  soon  become 
ashamed  of  the  declaration  of  incompetence  which  the 
Legislature  of  1906  made  in  its  behalf.  The  section  of 
the  New  York  law  which  limits  the  amount  of  funds 
which  a  company  may  hold  against  contingencies  is  con- 
trary to  all  previous  legislation  on  the  subject,  and  is 
unsound  in  theory.  As  it  stands  now,  the  law  fixes  the 
minimum  amount  which  a  company  must  hold  or  go  into 
bankruptcy,  and  a  maximum  amount  which  it  is  criminal 
to  exceed,  and  the  difference  between  the  two  is  not 
nearly  so  great  as  the  fluctuation  in  market  values  in  the 
best  securities  during  the  past  year.  This  might  be  called 
regulation  reduced  to  an  absurdity,  if  it  were  not  at  the 
same  time  regulation  which  may  end  in  destruction.* 

With  a  strange  disregard  of  consistency  the  New  York 
Legislature,  which  declared  that  the  regulating  power  of 
the  State  had  failed,  proceeded  to  call  on  the  State  to  at- 
tempt the  administration  of  business,  a  process  which  is 
confessedly  much  more  difficult  than  regulation.  They  pre- 
scribed not  only  how  much  may  be  paid  for  new  business, 
but  how  and  when  it  may  be  paid.  They  virtually  declared 
how  much  of  an  agent 's  earnings  he  must  save,  by  pre- 
scribing that  a  part  of  those  earnings  shall  not  be  paid  him 
until  a  year  or  two  years  or  three  years  after  his  work  is 
done.  They  adopted  a  program  which  in  effect  encourages 
extravagance  in  the  non-efficient  companies  and  ties  the 
hands  of  the  efficient  companies.  Had  the  New  York  legis- 
lators never  heard  of  the  long  series  of  abortive  attempts 
that  have  been  made  in  the  past  to  regulate  wages  and 
prices  by  law?  Are  we  demanding  too  much  of  those  who 
aspire  to  political  leadership  if  we  insist  that  they  shall  first 
learn  this  lesson,  viz:  that  the  function  of  the  regulating 


*The   danger  of  this  law   has   since  been  somewhat   reduced   by 
adopting  the  amortization  method  of  valuing  bonds. 


Life  Insurance  in  its  Relations  to  Sociology       209 

power  is  in  maintaining  men's  rights  and  not  in  directing 
their  activities  f 

Let  us  consider  now  to  what  extent  Life  Insurance,  in 
spite  of  its  conflict  with  the  State,  in  spite  of  the  crisis 
which  it  faces,  is  fulfilling  its  function.  This  is  a  fair 
question.  As  I  said  earlier,  society  exists  for  man  and  not 
man  for  society.  Organization  is  nothing  in  itself.  Does 
organization  accomplish  the  end  for  which  it  exists  ?  That 
is  the  question. 

In  his  work  on  General  Sociology,  Dr.  A.  W.  Small,  the 
head  of  the  sociological  department  of  the  University  of 
Chicago,  uses  the  word  "  achievement "  in  connection  with 
present  sociological  conditions  in  a  way  that  is  somewhat 
startling.  We  are  accustomed  to  think  that  the  American 
people  are  getting  on  in  a  way  to  make  us  all  proud,  and 
yet  when  the  results  of  all  of  our  social  processes  are 
mapped  out  and  summed  up  as  * '  achievements ' ',  we  begin 
to  see  how  far  we  fall  short  even  of  our  own  ideals.  We 
see  that  we  have  only  made  a  beginning  in  actually 
securing  health,  wealth,  proper  human  relations,  knowl- 
edge, arts,  and  religion. 

What  are  the  achievements  of  Life  Insurance  ? 

On  December  31,  1906,  the  latest  date  for  which  com- 
plete figures  are  available,  there  were  in  force  in  the  life 
companies  of  the  United  States  nearly  five  million  poli- 
cies of  Life  Insurance  on  the  ordinary  plan,  for  an  aver- 
age amount  of  a  little  over  twenty-one  hundred  dollars 
each,  and  nearly  nineteen  million  policies  on  the  industrial 
plan,  for  an  average  amount  of  about  one  hundred  and 
ninety  dollars  each.  Industrial  companies  insure  all  mem- 
bers of  the  family  above  one  year  of  age,  the  amount  of 
insurance  on  the  lives  of  children  being  limited  to  burial 
fund  proportions.  There  were  also  in  force  about  seven 
and  a  half  million  certificates  in  societies  operating  on 
more  primitive  plans,  calling  for  an  average  death  benefit 


210  Militant  Life  Insurance 

of  over  eleven  hundred  and  sixty  dollars.  The  amount  of 
the  accumulated  funds  of  these  various  organizations  was 
somewhat  over  three  thousand  million  dollars,  over 
twenty  nine  hundred  millions  belonging  to  the  organiza- 
tions operating  on  scientific  plans.  The  total  amount  paid 
annually  to  the  beneficiaries  of  these  various  organizations 
is  about  375  million  dollars.  Making  allowance  for  those 
insured  in  foreign  countries  and  for  those  who  are  insured 
under  more  than  one  policy,  there  are  approximately  three 
in  ten  of  our  total  population  insured  under  some  form 
of  contract,  two  in  nine  under  contracts  having  a  scientific 
basis,  and  one  in  twenty-one  under  a  system  that  provides, 
by  a  scientific  plan,  benefits  for  dependents  in  case  of  pre- 
mature death  and  for  the  support  in  old  age  of  those  who 
attain  old  age. 

Life  Insurance  has  fallen  so  far  short  of  the  achieve- 
ments involved  in  Dr.  Halley's  discovery,  (1)  because  the 
meaning  of  that  discovery  was  not  quickly  recognized, 
(2)  because  no  adequate  system  of  distribution  was  insti- 
tuted until  within  recent  years,  and  (3)  because  the  State 
has  recently  attacked,  partly  destroyed,  and  rigidly  lim- 
ited, the  future  operation  of  all  such  plants. 

The  old  Equitable  Life  Assurance  Society  of  London, 
organized  in  1762,  and  still  in  existence,  has  been  fre- 
quently referred  to  in  the  discussion  of  recent  legisla- 
tion as  an  example  of  what  a  Life  Insurance  company 
ought  to  be.  The  history  of  that  company  brings  us 
many  lessons.  By  its  persistence  for  nearly  one  hundred 
and  fifty  years  it  shows  how  completely  the  function  of 
Life  Insurance  co-ordinates  with  the  functions  of  other 
social  organisms.  That  company  has  no  distributing  sys- 
tem, no  agency  organization,  and,  as  a  result,  what  do 
we  find?  That  the  institution  has  accomplished  com- 
paratively nothing.  Although  managed  with  fine  fidelity, 
it  has  merely  marked  time  throughout  the  whole  period 


Life  Insurance  in  its  Relations  to  Sociology       211 

of  its  existence.  Discussing  this  situation  something  over 
two  years  ago,  I  said  : 

"If  the  world  generally  had  followed  the  example  of 
British  Life  Insurance  during  the  nineteenth  century, 
and  the  example  of  a  few  American  companies  during 
the  last  half  century,  England  would  now  be  a  second- 
rate  power,  Germany  would  be  made  up  of  impotent, 
quarreling  States,  the  United  States  would  never  have 
gone  west  of  the  Mississippi  River,  and  the  Japanese 
would  be  using  bows  and  arrows. ' ' 

No  institution  so  clearly  proves  the  absolute  necessity 
of  a  distributing  system,  an  agency  organization,  as  does 
the  old  Equitable.  It  proves  my  contention  on  the  nega- 
tive side.  The  history  of  certain  great  American  com- 
panies, their  prodigious  growth,  their  wonderful  success, 
the  great  service  which  they  have  rendered  the  world 
through  highly-organized  distributing  systems,  establishes 
the  claim  affirmatively.  The  absence  of  any  distributing 
system  in  the  old  Equitable,  coupled  with  its  lack  of 
achievement,  completes  the  argument.  Whatever  the 
achievements  of  Life  Insurance  have  been,  whatever  its 
development  during  the  last  fifty  years  has  been,  is  due 
immediately  and  directly  to  its  agency  force,  to  the  zeal 
and  intelligence  with  which  its  gospel  has  been  preached, 
to  that  part  of  its  organization  which  has  finally  come 
into  conflict  with  the  State. 

It  is  time  now  to  take  cognizance  of  the  ultimate 
meaning  of  Life  Insurance.  "We  do  not  reach  science", 
says  Dr.  Small,  "until  we  advance  from  knowledge  of 
what  has  occurred  to  knowledge  of  the  meaning  of  what 
has  occurred". 

Let  us  examine  Life  Insurance  a  little  more  closely 
while  it  is  performing  its  function  in  society  in  order  to 
ascertain  the  meaning  of  what  occurs. 


212  Militant  Life  Insurance 

(1)  Take  a  group  of  men  aged  twenty-one.  When  they 
insure  their  lives  what  does  it  mean  to  them  ? 

It  means  that  they  have  initiated  a  new  social  process 
by  which  they  will  be  able  to  pay  their  debts,  by  which  the 
probability  that  they  or  any  member  of  their  families  will 
ever  be  added  to  the  dependent  group  in  society  is  greatly 
decreased. 

Sociology  shows  that  for  everything  which  distin- 
guishes the  present  state  of  society  from  barbarism  we 
are  indebted  to  the  past.  Every  man  is  a  debtor  accord- 
ing as  he  has  received,  and  the  young  man  who  has  been 
nurtured  and  educated  by  the  social  processes  of  the 
present  generation  owes  a  great  debt.  It  will  take  time 
to  pay  it,  and  time  is  the  one  thing  he  is  not  sure  of.  He 
may  die  to-morrow.  Life  Insurance  shows  him  that  a 
certain  proportion  of  the  men  of  his  age  will  die  during 
the  coming  year,  and  that  other  members  will  die  during 
each  ensuing  year  until  all  are  dead.  It  shows  that,  while 
some  will  not  live  a  year  longer,  others  will  live  over 
seventy  years  longer,  and  that  the  average  number  of 
years  which  all  will  live  after  age  twenty-one  is  over 
forty.  The  man  who  dies  young  cannot  possibly  pay  his 
debt  by  ordinary  methods,  but  Life  Insurance  is  a  process 
in  which  the  man  aged  twenty-one  is  dealt  with  on  the 
assumption  that  he  will  live  forty  years  longer.  By  a 
small  sum  which  he  has  already  earned,  and  other  equal 
sums  which  he  may  earn  in  each  year  as  long  as  he  lives. 
he  provides  for  the  payment  of  his  debt,  whether  he  dies 
soon  or  lives  long.  This  means  to  him  an  increasing  sense 
of  self-respect  and  of  freedom.  He  has  made  provision 
from  his  own  resources  for  paying  his  debt;  and  he  now 
plans  and  works,  not  in  the  shadow  of  a  doom  that  may 
interrupt  his  plans  and  cut  short  his  work,  but  with  the 
assurance  that  his  plans  may  be  carried  out  and  his  work 
completed,  in  a  measure,  no  matter  when  death  may  inter- 


Life  Insurance  in  its  Relations  to  Sociology       213 

vene.  This  danger  to  his  life  plans,  which  was  before 
vague  and  uncertain  but  absolutely  fatal  when  it  came, 
has  now  been  definitely  located,  measured  and  provided 
for.  He  may  now  plan  and  work  on  the  assumption  that 
he  has  forty  years  of  life  before  him.  He  has  capitalized 
his  youth,  his  health,  his  education  and  his  skill  in  a  form 
that  enables  him  to  pay  his  debt,  but  not  in  a  form  that 
enables  him  to  spend  it  or  lose  it.  On  the  other  hand  he  is 
now  at  liberty  to  use  more  freely  in  other  ways  the  capital 
he  accumulates  by  other  methods,  because  he  has  provided 
for  the  future  of  his  family. 

Again,  if  it  be  said  that  Life  Insurance  does  not  di- 
rectly create  material  values,  but  is  only  a  method  of  dis- 
tribution, the  sociological  answer  is  that  distribution  is 
necessary  in  order  that  other  social  processes  may  go  on. 
The  grain  raised  on  a  Western  prairie  would  have  little 
value  if  it  could  not  be  so  distributed  as  to  be  available 
for  those  who  need  it.  It  is  worth  more  in  Chicago  than 
where  it  grew,  more  in  New  York  than  in  Chicago,  more 
in  Liverpool  than  in  New  York.  Our  whole  transportation 
plant,  which  earns  more  than  almost  any  other  single 
industrial  plant  in  the  country,  is  based  upon  the  princi- 
ple that  distribution  adds  to  value.  A  human  life  strictly 
by  itself  may  have  little  value.  As  a  part  of  the  social  unit 
which  we  call  the  family,  it  has  more  value.  As  a  part  of 
the  civil  organization  which  we  call  the  State,  it  has  a  still 
higher  value — higher  chiefly  because  it  is  now  in  combina- 
tion with  others.  As  a  member  of  an  organization  which 
may  comprehend  millions  of  similar  units,  based  on  an 
immediate  capitalization  of  the  value  of  every  unit,  in 
other  words,  as  a  factor  in  the  co-operation  and  distribu- 
tion which  Life  Insurance  inaugurates,  the  individual  life 
finds  its  highest  sociological  usefulness. 

Life  Insurance  not  only  increases  wealth  by  distribu- 
ting it — it  transforms  material  wealth  into  social  wealth. 


214  Militant  Life  Insurance 

Money  is  of  value  only  for  what  it  will  buy,  and  the  wise 
man  is  continually  exchanging  it  for  something  better. 
Life  Insurance  transforms  money  into  comfort,  self- 
respect,  education,  character.  From  a  sociological  stand- 
point processes  are  valuable  according  as  they  create  con- 
ditions and  sentiments  favorable  to  still  better  processes. 
The  co-operation  of  patriotism  creates  conditions,  but  it 
adds  no  new  element  to  human  association  and  it  ulti- 
mately depends  upon  force  and  violence.  In  the  co-opera- 
tion of  industrialism  the  utilization  of  new  materials  and 
new  processes  is  a  most  important  sociological  feature, 
but  new  processes  and  new  machinery  render  the  old 
useless  and  create  new  conflicts,  so  that  the  net  gain 
to  society  is  thereby  diminished.  Life  Insurance  intro- 
duces a  new  element  into  co-operation— the  continuity  of 
the  race — and  upon  this  basis  it  erects  a  social  structure 
that  destroys  no  pre-existing  values,  creates  no  new  con- 
flicts, and  depends  in  its  operation  upon  moral  and  social 
forces.  It  seeks  what  the  sociologist  seeks — the  better- 
ment of  society,  that  is,  the  society  of  the  future.  It 
makes  its  appeal  to  the  profoundest  instincts  of  man- 
hood, and  those  who  answer  the  appeal  are  so  quickened 
in  their  moral  nature  that  they  are  better  prepared  for 
their  other  work  as  social  units.  Patriotism, — admirable 
as  it  is,— tends  to  separate  men  of  different  nationalities, 
to  make  them  contingent  enemies;  industrialism, — nec- 
essary as  it  is, — introduces  a  competition  that  is  akin  to 
war,  and  its  progress  is  attended  with  conflict  and  waste. 
Life  Insurance  draws  men  together  as  moral  and  social 
forces  whose  highest  interests  lie  in  the  future  and  in 
their  children. 

(2)  What  does  Life  Insurance  mean  with  respect  to 
those  for  whose  benefit  men  insure?  So  long  as  the  head 
of  the  family  lives,  all  the  members  share  with  him  to 
some  extent  in  the  improved  status  which  Life  Insurance 


Life  Insurance  in  its  Relations  to  Sociology       215 

gives  to  the  family  as  a  whole.  If  he  dies  prematurely, 
Life  Insurance  prevents  the  pathological  condition  into 
which  his  family  would  otherwise  fall.  They  are  not 
placed  in  abnormal  relations  to  the  social  organism,  but 
are  enabled  to  continue  the  status  quo.  Their  development 
will  proceed  in  an  orderly  manner,  without  any  violent 
change  of  relations  in  their  environment.  In  this  environ- 
ment a  sudden  change,  either  from  affluence  to  poverty 
or  from  poverty  to  affluence,  is  not  in  accord  with  the 
most  helpful  social  process  and  is  in  either  case  usually 
a  misfortune.  Life  Insurance  rates  a  man  at  what  he  is 
worth,  not  by  any  arbitrary  standard,  but  by  what  he  is, 
physically  and  economically,  and  at  his  death  it  passes 
this  value  on  to  his  family. 

Again,  Life  Insurance  fulfils  for  the  family  the  law 
of  the  family,  the  first  law  of  Sociology,  that  members 
are  to  be  treated  according  to  their  needs,  and  not 
according  to  their  capacities.  It  makes  provision 
for  that  education  and  culture  of  children  which  the 
father  would  make  if  he  lived.  Society  at  large, 
seeing  the  necessity  of  education,  creates  and  maintains, 
as  I  have  noted,  at  great  expense  an  educational  struc- 
ture, in  order  that  all  children  may  receive  some  degree 
of  the  training  necessary  for  their  efficiency  as  units  in 
the  social  organism. 

"The  primary  symptom  of  failing  health  in  a  body 
politic'*  is  declared  by  the  sociologist  to  be  "lack  of 
opportunity— opportunity  primarily  industrial,  then  op- 
portunity of  every  sort  in  which  the  interests  of  the 
individual  are  capable  of  being  effective".  Obviously, 
the  opportunity  of  an  education  is  lacking  to  the  child 
who  is  kept  from  school  to  add  to  the  income  of  the 
family  by  its  labor. 

(3)  What  does  Life  Insurance  mean  to  society  at 
large?  As  society  is  made  up  of  units,  it  follows  that  the 


216  Militant  Life  Insurance 

well-being  of  the  organism  will  be  promoted  by  anything 
that  benefits  the  individual  units.  If  Life  Insurance 
enables  men  to  pay  their  debts  and  to  work  according  to 
larger  plans ;  if  it  creates  a  new  social  process  that  avoids 
conflict  and  waste ;  if  it  adds  to  material  wealth  by  scien- 
tific distribution  and  to  social  wealth  by  its  wise  response 
to  social  needs;  if  it  enables  the  family  to  develop  along 
normal  lines,  without  any  of  those  violent  wrenches 
which  tend  to  throw  the  social  organism  out  of  gear;  then 
it  supplies  the  conditions  and  forces  for  a  normal  and 
healthy  development  of  society  itself.  Society  always 
has  on  its  hands  certain  classes  of  dependents  for 
whom  it  must  provide — one  of  its  most  difficult  prob- 
lems. It  grapples  with  such  problems  with  clumsy 
hands.  They  belong  to  the  family  and  can  properly 
be  solved  nowhere  else.  Life  Insurance  tends  to 
prevent  any  further  increase  of  this  class,  and  by 
increasing  the  number  and  maintaining  the  efficiency 
of  the  better  class,  it  strengthens  the  hands  of 
society  for  the  work  it  must  do.  It  increases  also  the 
number  of  those  who,  having  provided  for  the  sustenta- 
tion  of  life,  are  able  to  give  time  and  strength  to  the 
augmentation  of  life — to  its  enrichment  by  culture  and 
the  arts  and  to  the  development  of  better  structures  in 
the  social  organism.  It  is  thus  in  harmony  with  the  final 
purpose  of  the  social  process  which  is  declared  to  be 
4 'the  incessant  evolution  of  persons  through  the  evolu- 
tion of  institutions,  which  evolve  completer  persons,  who 
evolve  completer  institutions,  and  so  on  beyond  any  limit 
we  can  fix". 


REMARKS  ON  EXISTING 
LAWS  AND  EUROPEAN  BUSINESS 


BEFORE  A  MKETINQ  MADE  UP  OF  THE  AGENCY  AND  HOME  OFFICE  ORGANIZATIONS  IN 

FRANCE,  ON  THE  OCCASION  OF  THE  FIRST  ANNIVERSARY  OF  HIS 

ELECTION  TO  THE  PRESIDENCY.    JUNE  17,  1908 


ENTLEMEN:  I  respond  cordially  to  the 
sentiment  expressed  by  our  Chairman, 
Mr.  Ingersoll.  He  referred  to  the  New- 
York  Life  as  the  leading  institution  in 
life  insurance;  I  would  carry  the  senti- 
ment even  farther  and  congratulate  you 
on  being  assembled  for  the  furtherance 
of  the  interests  not  only  of  the  greatest 
Company  but  for  the  furtherance  of  the 
interests  of  the  greatest  business  in  the  world. 

I  cannot  adequately  express  the  pleasure  it  gives  me  to 
meet  the  Company's  organization  in  France  in  this  way 
face  to  face,  without  a  reference  which  may  seem  to  you 
almost  personal— a  reference  which  I  trust  you  will  con- 
sider not  out  of  place. 

All  the  scenes  of  my  childhood  and  the  traditions  which 
surrounded  it,  were  associated  with  the  names  and  deeds  of 
great  Frenchmen.  Almost  within  sight  of  the  spot  where 


217 


218  Militant  Life  Insurance 

I  was  born  and  the  town  in  which  I  grew  to  manhood, 
occurred,  three  hundred  years  ago,  a  battle,  which,  while 
not  generally  rated  as  one  of  the  great  conflicts  of  the 
world,  was  beyond  question  one  of  the  decisive  events  in 
the  world's  history.  In  July,  1609,  Samuel  de  Champlain 
and  a  band  of  eighty  Huron  Indians  met,  not  far  from  the 
present  site  of  historic  Fort  Ticonderoga,  a  band  of  a  hun- 
dred Iroquois  Indians,  and  a  battle  ensued  that  was  short, 
sharp  and  decisive.  The  white  man's  fire-arm  humbled  the 
proud  Iroquois;  but  as  the  result  of  the  conflict  the  Iro- 
quois became  the  implacable  enemy  of  the  French— an 
enmity  which  mightily  influenced  all  the  future  history  of 
the  American  Continent.  That  battle  and  its  results  and 
traditions  are  almost  a  part  of  the  folk  lore  of  Northern 
Vermont.  One  hundred  and  fifty  years  later  came  the 
victory  of  Montcalm  over  the  allied  English  and  Ameri- 
cans. This  conflict  was  also  fought  within  the  same  horizon, 
and  its  traditions  remain  to  this  day. 

Between  the  time  of  Champlain  and  the  time  of  Mont- 
calm  there  is  a  long  line  of  French  heroes,  the  record  of 
great  deeds  by  great  Frenchmen,  which  will  for  ever  re- 
main a  part  of  the  history  of  all  America.  They  were  bold 
adventurers— those  early  Frenchmen— explorers,  empire- 
makers.;  some  of  them  great  priests  carrying  the  Cross. 
Associated  for  ever  with  the  discovery  and  development  of 
the  Mississippi  Valley  are  the  names  of  La  Salle,  Mar- 
quette,  Hennepin,  Joliet  and  Tonti:  they  were  the  boldest 
men  of  the  time;  they  had  not  only  courage  but  imagina- 
tion. While  the  English,  with  that  genius  for  colonization 
and  dogged  determination  which  have  made  the  British 
Empire,  were  colonizing  and  developing  the  Atlantic  coast, 
Frenchmen  were  laying  out  trails  through  a  new  world, 
opening  up  what  was  then  a  dark  and  unknown  country. 

As  a  boy  I  lived,  and  played  as  boys  do,  on  the  shores 
of  the  Lake  whose  name  is  a  worthy  monument  to  that  first 


European  Business— 1908  219 

great  path-finder— Champlain.  I  am  also  one  ..of  those 
whose  ancestry  goes  back  directly  to  the  men  who  fought 
in  the  American  Revolution.  I  was  early  taught  to  revere 
the  name  La  Fayette,  almost  equally  with  the  name  of 
Washington;  and  to-day  on  the  campus  in  front  of  the 
principal  building  of  the  University  from  which  I  gradu- 
ated stands  a  beautiful  bronze  figure  of  La  Fayette. 

A  man  or  an  institution  usually  has  the  reputation  that 
the  man  or  the  institution  deserves.  The  New- York  Life 
has  in  France  been  doing  work  which  it  was  chartered  to 
do,  for  a  period  of  thirty-eight  years.  It  has  for  thirty- 
eight  years  kept  the  utmost  letter  of  its  faith  with  the 
French  people.  Thirty-eight  years  of  just  and  honorable 
living  entitles  a  man  and  entitles  an  institution  to  a  good 
reputation;  and  I  think  I  do  not  overstate  the  fact  in 
claiming  that  the  New- York  Life  has  deserved  and  has 
in  France,  a  reputation  which  is  second  to  none. 

May  I  acknowledge  just  here,  because  the  acknowledg- 
ment is  due  and  because  I  shall  probably  never  have  a 
better  opportunity,  the  obligation  which  the  Company  is 
under  to  its  General  Director  for  Europe,  Mr.  William  E. 
Ingersoll.  I  doubt  if  any  man,  not  charged  with  large  re- 
sponsibility at  the  Home  Office  of  the  Company,  can  fully 
understand  the  importance  of  having  at  a  point  like  this 
the  right  kind  of  man.  It  is  always  possible  to  criticise  any 
man;  I  sometimes  think  that  criticism  comes  more  easily 
than  praise.  It  would  be  possible  to  find  men  who  in  this 
quality  or  in  that  quality  might  be  said  to  surpass  our 
General  Director;  but  take  him  all  in  all,  up  and  down, 
day  in  and  day  out,  year  in  and  year  out,  for  a  period 
covering  more  than  an  entire  generation,  at  a  point  when 
problems  were  peculiarly  difficult  and  vexatious,  and  I 
doubt  if  the  Company  in  all  the  round  world  could  have 
found  a  man  who  would  have  served  it  better  than  Mr. 
Ingersoll  has. 


220  Militant  Life  Insurance 

May  I  add  another  word  of  acknowledgment.  We  ap- 
preciate in  New  York  beyond  expression  the  faithful  ser- 
vice, the  patience,  the  industry,  the  capacity  and,  above  all, 
the  fine  fidelity  of  those  loyal  men  who  have  so  long  served 
the  Company  here  both  in  the  Head  Office  and  in  the  Field. 

This  meeting  to-night  practically  completes  a  trip  which 
was  planned  in  order  that  I  might  acquire  a  kind  of  infor- 
mation which  I  never  could  otherwise  become  possessed  of : 
I  wanted  to  see  not  only  the  extent  of  the  Company's  or- 
ganization, but  its  quality.  I  wanted  to  see  and  know  of 
what  fibre  it  was  made,  how  it  ranked  in  the  country,  where 
it  might  be  domiciled ;  and  so  I  have  been  to  Spain  and  Italy, 
to  Hungary  and  Austria,  all  through  Russia,  and  to  Ger- 
many. I  thought  I  understood  adequately  the  honor  which 
came  to  me  a  year  ago  to-day  when  the  Board  chose  me  as 
the  official  head  of  the  Company.  I  had  often  referred  to 
the  institution  in  its  international  relations;  I  had  always 
been  an  advocate,  generally  speaking,  of  its  foreign  busi- 
ness; but  now  that  I  have  substantially  completed  a  jour- 
ney through  that  part  of  the  world  where  life  insurance 
is  most  important,  now  that  I  have  seen  and  know  by  direct 
and  affirmative  knowledge  the  position  which  the  New- 
York  Life  holds,  I  believe  I  have  a  truer  understanding  of 
the  quality  of  the  Company's  position  in  the  world  and  of 
the  extent  and  the  importance  of  its  opportunity:  I  am 
sure  I  have  a  deeper  sense  of  obligation  to  the  Trustees  who 
elected  me,  and  to  the  policy-holders  who  elected  them. 

In  responding  to  your  congratulations  on  this  occasion, 
I  have  no  formal  address  to  make.  My  meetings  every- 
where have  been  informal;  my  purpose  has  been  not  to 
instruct  but  to  learn. 

The  times  are  hard ;  these  are  the  days  when  the  organi- 
zation must  get  into  compact  formation.  There  perhaps 
was  never  a  time  when  the  organization  in  Europe  so  much 
needed  direct  assurances  from  the  Home  Office. 


European  Business— 1908  221 

The  events  in  American  life  insurance  during  the  past 
three  years  present  one  picture  when  seen  from  New  York 
and  another  picture  when  the  observer  has  your  view-point. 
Reviewing  those  events  during  the  past  two  months  from 
the  European  standpoint,  I  have  asked  myself  this  ques- 
tion: what  would  I  have  done  if  the  situation  had  been 
reversed?  Suppose  I  in  New  York  had  served  a  European 
company  for  the  better  part  of  my  lifetime,  and  suppose  a 
similar  upheaval  had  come  in  the  business  in  which  I  was 
engaged,  and  suppose  within  my  own  company  there  had 
been  tragedies,  and  suppose  my  sources  of  information  had 
been  largely  the  misinformation  which  came  from  an  hys- 
terical and  irresponsible  press, — would  I  have  been  as 
faithful,  steadfast  and  loyal  as  you  have  been  ?  I  have  not 
yet  been  able  to  give  myself  a  satisfactory  answer  to  my 
own  question.  And  so  I  say  you  are  entitled  to  know  by 
direct  assurance,  by  such  authority  as  I,  under  the  By-Laws 
and  the  election  of  the  Board,  can  bring  you,  not  only  what 
the  real  situation  in  New  York  is,  but  what  the  attitude  of 
the  Company  is  toward  you. 

First,  as  to  the  situation  in  New  York.  The  present  life 
insurance  laws  of  that  State  are  in  many  respects  bad; 
they  are  in  many  respects  good.  They  were  passed  in  haste 
under  the  pressure  of  an  infuriated  public  sentiment :  they 
were  drafted  by  a  man  whose  knowledge  of  life  insurance 
was  limited  to  what  he  had  been  able  to  assemble  hastily 
within  a  few  months,  during  which  time  he  was  engaged  not 
at  all  in  discovering  of  what  real  value  life  insurance  was  to 
society  and  to  the  State.  I  am  disposed  to  believe  that  in 
a  country  like  the  United  States  a  certain  amount  of  what 
we  call  "muck-raking"  is  periodically  necessary;  but  the 
process,  in  my  judgment,  does  not  qualify  a  man  to  write 
the  Statutes  of  a  State.  It  has  caused  life  insurance  men 
and  business  men  no  surprise  to  discover  that  these  laws 
have  done  many  things  that  they  were  not  intended  to  do, 


222  Militant  Life  Insurance 

and  have  failed  to  do  many  things  that  their  author  ex- 
pected they  would  do.  That  is  always  the  history  of  hasty 
legislation. 

An  earnest  and  sincere  movement  to  eliminate  the  bad 
features  of  these  laws,  to  correct  them  where  the  under- 
lying principle  was  unsound  and  dangerous,  was  inaugu- 
rated as  long  ago  as  September  last.  The  movement  culmi- 
nated in  a  Bill  to  modify  the  Section  which  not  only  limits 
but  absolutely  fixes  the  compensation  that  the  soliciting 
agent  shall  be  paid.  This  measure  passed  the  Legislature 
of  the  State  of  New  York  by  a  practically  unanimous  vote. 
Here  was  evidence  of  the  intention  on  the  part  of  the  peo- 
ple of  the  State  of  New  York  to  do  justice;  here  was  evi- 
dence of  a  revised  public  opinion;  but  before  the  measure 
could  become  law  it  needed  the  approval  of  the  Governor 
of  the  State,  and  the  Governor  of  the  State  had  written  the 
Statute  under  discussion.  It  was  a  just  amendment,  so 
just  that  it  had  the  support  of  all  life  insurance  companies 
and  the  opposition  of  none ;  but  the  Bill  was  vetoed. 

My  assurance  to  you  with  regard  to  the  present  situa- 
tion is,  notwithstanding  the  veto  by  the  Governor,  that 
there  has  been  a  long  advance  toward  a  sane  and  sound 
and  just  revision  of  the  insurance  laws  of  the  State  of  New 
York.  I  am  giving  you  merely  my  opinion  and  you  will  of 
course  take  it  for  what  you  may  think  it  worth;  but  my 
opinion  is  that  in  the  year  1909  there  will  come  material 
modifications  in  the  vicious  and  dangerous  principles  con- 
tained in  these  laws  and  at  no  distant  date  a  complete 
reconstruction  and  revision  of  the  insurance  laws  of  the 
State  of  New  York. 

No  other  conclusion  is  possible.  I  argue  in  this  respect 
as  I  did  recently  with  regard  to  the  future  of  Russia. 
Travel  through  Russia,  as  I  have  just  done;  see  the  im- 
mensity of  the  country,  its  almost  endless  and  marvellously 
fertile  plains,  its  great  rivers,  its  mineral  resources:  look 


European  Business— 1908  223 

then,  if  you  will,  upon  its  problems,  which  are  tremendous 
and  ask:  what  is  the  future  of  Russia?  You  cannot  fore- 
cast it  without  taking  social  and  political  problems  into  the 
account.  How  will  they  be  solved  ?  No  one  can  say.  When 
will  they  be  solved  ?  No  one  can  answer ;  but  that  they  will 
be  solved  is  certain.  That  some  day  in  that  great  country 
will  be  an  enlightened,  powerful,  self -controlled  and  happy 
people,  is  as  certain  as  anything  can  be:  any  other  conclu- 
sion must  be  born  of  the  doctrine  of  despair.  And  so  I  say, 
aside  from  the  attitude  of  the  Legislature  of  the  State  of 
New  York,  which  is  committed  to  revision;  aside  from  the 
demand  of  substantially  all  the  life  insurance  companies 
of  America,  which  commits  them  to  revision,  I  am  willing 
to  rest  our  cause  on  the  splendid  usefulness  of  life  insur- 
ance, its  value  to  society,  the  general  fidelity  with  which 
its  obligations  have  always  been  discharged,  and  conclude 
that  for  that  reason  sooner  or  later  bad  laws  must  be 
repealed,  foolish  laws  must  be  modified,  because  the  inter- 
ests of  society  will  demand  it. 

Now  a  word  as  to  the  Company's  attitude  towards  you. 
When  the  decree  went  forth  that  the  NEW-YORK  LIFE 
after  the  first  January,  1907,  would  be  allowed  under  no 
conditions  to  issue  and  pay  for  more  than  150  million  dol- 
lars of  new  business  within  a  year,  that  decree  might  have 
been  considered  as  a  menace  to  you  particularly.  If  the 
Company  had  had  a  narrow  or  provincial  view  of  its  obli- 
gations, that  would  have  been  the  case.  But  I  confess  it 
never  occurred  to  any  of  us  that  our  obligation  to  a  man 
who  has  spent  25  years  in  the  Company's  service  in  Paris 
was  any  less  or  any  different  from  the  obligation  which  we 
were  under  to  a  man  who  has  served  all  his  life  at  346 
Broadway.  You  might  have  feared  at  the  time— possibly 
some  of  you  did— that  under  this  rigid  limitation,  the  Man- 
agement of  the  Company  would  conclude,  so  to  speak,  to 
take  care  of  its  own,  to  cut  off  all  foreign  branches,  on  the 


224  Militant  Life  Insurance 

theory  that  within  the  limits  of  the  United  States  the 
amount  which  the  law  allows  us  to  write  could  be  secured. 
Such  a  view  of  the  situation  never  had  a  moment's  con- 
sideration. We  were  compelled  by  the  law  to  destroy  de- 
liberately a  very  large  part  of  the  structure  to  which  we 
have  all  devoted  years  of  enthusiastic  labor;  but  the  de- 
struction in  the  United  States  is  just  as  much  in  evidence 
as  here:  we  closed  relatively  as  many  Branch  Offices  and 
cut  as  many  salaries. 

So  far  as  the  Agency  organization  is  concerned,  we  have 
within  that  time  retired  from  only  two  jurisdictions:  over 
here  from  Portugal,  because  of  conditions  with  which  we 
could  not  comply,  and  over  there  from  Texas,  an  important 
part  of  our  home  organization,  where  laws  were  passed 
worse  than  anything  ever  written  on  any  Statute  Book  of 
Europe  or  covered  in  any  Ministerial  Decree. 

These  considerations  ought  to  give  you  a  fair  view  of  the 
Company's  attitude  toward  existing  laws  and  toward  its 
European  business.  I  cannot  guarantee  that  the  New  York 
laws  will  be  modified.  I  believe  they  will  be.  Not  only 
that,  but  I  pledge  you  that  whatever  influence  I  possess 
will  be  employed  early  and  late  in  securing  a  just  revision. 
I  can  give  you  no  conclusive  pledges  as  to  what  the  Com- 
pany will  do  in  Europe:  the  Board  of  Trustees  is  the 
supreme  authority;  but  judging  by  the  attitude  which  it 
has  maintained  for  a  period  of  almost  forty  years,  I  believe 
I  am  warranted  in  saying  that,  barring  laws  which  are 
worse  than  those  we  have  in  New  York  State,— and  that  is 
saying  a  good  deal,— we  shall  remain  in  all  the  principal 
countries  of  Europe.  We  shall  remain  because  we  hold 
that  the  New- York  Life  has  no  reason  for  existence  unless 
it  does  the  business  for  which  it  was  chartered,  and  does  it 
in  accordance  with  the  plans  of  the  broad-minded  men  who 
long  ago  planted  its  organization  all  over  the  civilized 
world. 


European  Business— 1908  225 

We  believe  the  New- York  Life  ought  to  expand  and 
grow.  We  believe  that  it  is  equipped  as  no  other  company 
is,  to  do  the  high  order  of  work  in  which  we  are  engaged. 
We  believe  that  the  unforgivable  offence  is  committed  by 
the  institution  which  squanders  opportunity. 

The  question  is :  how  shall  the  New- York  Life  develop  1 
How  may  it  expand?  How  may  its  outstanding  insurance 
of  two  billion  dollars  become  four  billion  dollars?  There 
is  only  one  way— that  is  by  a  larger,  a  stronger  and  a  more 
perfect  organization  of  its  Agency  Department.  And  how 
may  men  of  the  right  type  be  secured  ?  In  only  one  way : 
they  must  be  offered  a  career;  they  must  be  offered  attrac- 
tive opportunities;  they  must  be  able  to  see  fair  remunera- 
tion for  honest  work.  What  then  shall  we  pay  them  1  That 
is  the  great  question.  If  we  could  expand  our  two  billion 
dollars  of  outstanding  insurance  until  it  became  four  bil- 
lions, and  pay  the  agent  only  ten  per  cent,  of  the  premium, 
it  would  be  our  duty  to  do  it.  But  that  cannot  be  done. 
If  we  could  accomplish  that  great  purpose  and  pay  only 
twenty  per  cent,  commission,  it  would  be  our  duty  to  do 
it.  But  such  a  program  is  impossible.  If  we  could  ac- 
complish that  purpose  and  pay  forty  per  cent,  of  the  first 
year's  premium,  it  would  be  our  duty  to  do  it.  But  the 
experience  of  three-quarters  of  a  century  shows  that  it 
cannot  be  done.  The  great  thing  is  to  do  it — do  it,  exer- 
cising at  the  same  time  wise  economy  with  full  publicity. 

Life  insurance  is  of  such  serious  importance  to  society 
and  to  the  State  that,  whatever  it  costs,  when  honestly 
done,  and  within  the  provision  for  cost,  it  is  worth.  The 
State  should  see  that  it  is  honestly  done ;  should  insist  on 
rational  publicity.  But  the  real  aim  of  legislation  should 
be  to  encourage  a  larger  production.  Instead  of  destroy- 
ing great  Agency  plants  and  undertaking  the  details 
of  administration,  the  State  would  be  better  employed 
in  discussing  the  revocation  of  the  Charters  of  certain 


226  Militant  Life  Insurance 

companies  which  have  dawdled  away  the  years  and  frit- 
tered away  opportunity. 

I  have  found  all  over  Europe  the  friendliest  feeling 
toward  America.  I  have  found  more  than  that:  I  have 
found  in  all  classes,  from  Prime  Ministers  to  porters,  not 
only  friendliness  but  hopefulness.  America  is  still  the 
land  of  opportunity,  and  the  world  still  maintains  the 
romantic  interest  that  goes  with  such  an  attitude. 

Opportunity:  that  expresses  it.  A  profound  appreci- 
ation of  opportunity  explains  the  noble  proportions  of  our 
Company. 

I  hold  therefore  that  the  New- York  Life  is  more  than 
a  mere  Corporation  doing  a  given  line  of  business.  To 
everything  which  it  does  there  attaches  the  responsibility 
that  is  inseparable  from  every  great  social  force.  We 
have  advanced  into  a  larger  world  where  we  must  meet 
new  and  larger  responsibilities — a  world  in  which  the 
Company  is  yet  to  perform  its  finest  service. 


THE  RELATION  OF  THE  STATE  TO 
LIFE  INSURANCE 


AN  ADDRESH  BEFORE  A  CONFERENCE   MADE   trp   OF   SOME   OF   THE    LEADING   FIELD 

ORGANIZERB  AND  AGENTS  OF  THE  COMPANY,  HELD  AT  THE  HOTEL  FBONTENAO, 

FBONTENAO,  N.  Y.,  SEPTEMBEB  16, 16  AND  17, 1908 


>T  IS  evident  to  the  student  of  public  af- 
fairs in  the  United  States  that  we  have 
entered  upon  a  new  era  both  with  re- 
spect to  the  questions  which  are  subjects 
of  public  debate  and  of  legislation,  and 
also  with  respect  to  the  degree  in  which 
the  legislative  and  executive  powers  of 
the  state  shall  be  exercised.  The  ques- 
tions of  earlier  times  were  general  in 
their  character,  concerning  which  it  was  only  necessary 
to  establish  certain  principles  in  order  to  settle  them. 
The  new  questions  are  more  specific.  When  general 
principles  have  presumably  been  established,  we  now  find 
that  we  are  only  at  the  beginning  of  the  discussion — there 
remain  complicated  questions  of  right  and  expediency  in 
the  application  of  principles. 

It  will  probably  always  be  a  question  just  where  the 
dividing  line  between  State  and  Federal   authority  lies. 

227 


228  Militant  Life  Insurance 

During  the  early  years  of  the  general  government  it  was 
natural  that  the  extent  of  its  authority  should  have  been 
one  of  the  chief  subjects  of  political  discussion.  One  of 
the  first  issues,  therefore,  upon  which  the  people  divided 
politically  was  Federalism.  It  is  instructive  to  note  how 
many  political  issues  hinged  sooner  or  later  upon  Federal- 
ism— or  the  relations  of  the  States  to  the  Federal  Gov- 
ernment. 

The  question  of  expansion,  which  came  up  first  in  con- 
nection with  the  Louisiana  Purchase,  and  which  was  sub- 
sequently involved  in  the  acquisition  of  Florida,  Texas, 
the  territory  out  of  which  we  have  since  created  California 
and  other  States,  Hawaii  and  the  Philippines,  was  also  a 
question  involving  the  rights  and  powers  of  the  Federal 
Government.  The  same  was  true  to  a  large  extent  of  the 
questions  of  a  United  States  bank  and  of  internal  im- 
provements. Even  the  tariff  once  threatened  the  dissolu- 
tion of  the  Union  on  the  same  grounds — namely  the  right 
of  the  Federal  Government  to  impose  duties  without  re- 
gard to  the  protests  of  individual  States.  The  question 
of  slavery,  which  more  than  any  other  one  question  domi- 
nated National  politics  for  over  seventy  years  after  the 
adoption  of  the  Federal  Constitution,  involved  the  ques- 
tion of  the  rights  of  the  Federal  Government  in  the  Terri- 
tories, and  so  tenaciously  were  opposing  opinions  held 
that  the  right  of  secession  was  finally  invoked  and  the 
Union,  which  began  with  compromise,  was  only  preserved 
by  bloody  civil  war. 

Upon  all  these  questions,  as  upon  questions  pertaining 
to  reconstruction,  greenbacks  and  silver,  which  have  since 
been  prominent  in  politics,  it  was  easy  to  take  sides.  Men 
were  for  a  strong  central  government  or  against  it;  they 
favored  expansion  or  they  opposed  it ;  they  would  have  a 
central  bank  under  government  auspices,  or  they  would 
have  none  of  it;  they  were  pro-slavery  or  anti-slavery; 


The  Relation  of  the  State  to  Life  Insurance      229 

they  were  free-traders  or  protectionists  or  believers  in 
tariff  for  revenue  only.  The  issues  generally  stood  out 
clear  and  plain. 

The  questions  that  confront  us  to-day  also  involve  the 
question  of  Federal  power,  but  they  differ  from  former 
questions  in  being  more  of  a  commercial  character,  and  in 
being  exceedingly  complex.  The  essential  principles  in- 
volved are  not  so  easily  apprehended  by  the  ordinary 
citizen,  and  decisions  for  and  against  are  much  more 
likely  to  be  the  result  of  prejudice  or  selfish  interest. 
The  moral  and  political  principles  involved  are  more  ob- 
scure and  require  more  careful  study  for  their  proper 
comprehension.  It  would  perhaps  be  too  much  to  say 
that  a  higher  order  of  statesmanship  is  required  to  settle 
modern  questions,  but  this  certainly  is  true,  that  they 
require  a  wider  knowledge  of  economic  laws,  and  more 
careful  discrimination  with  respect  to  the  proper  function 
of  the  governing  power. 


I  make  this  general  preliminary  statement  in  order 
to  bring  into  bold  relief  the  fact  that  the  question  I 
propose  to  discuss  is  not  an  isolated  question,  but  that 
it  is  one  of  the  complicated  questions  of  the  time,  which 
calls  for  thorough  study  and  broad  statesmanship.  It 
also  demands  that  every  step  taken  which  is  in  the  nature 
of  an  innovation  should  be  carefully  scrutinized,  and  that 
the  principles  involved  should  be  clearly  perceived.  I 
may  say  further  that  the  question  of  the  Relation  of  the 
State  to  Life  Insurance  is  also  one  which,  although  ruled 
out  of  the  questions  over  which  the  Federal  Government 
has  jurisdiction,  is  nevertheless  a  question  of  National 
scope  and  importance,  and  the  problem  of  its  proper 
regulation  would  be  greatly  simplified  if  it  could  be 
settled  on  National,  instead  of  on  State,  lines. 


230  Militant  Life  Insurance 

I  assume  at  the  outset  that  the  State  has  the  right  to 
supervise  the  corporations  which  it  has  created;  and  it 
will  probably  be  conceded  that  such  supervision  should 
be  appropriate  to  the  nature  of  the  business  and  in  ac- 
cordance with  well  established  economic  laws. 

I  wish  to  call  attention  first  to  the  radical  difference 
between  a  life  insurance  corporation,  and  other  corpora- 
tions whose  proper  supervision  is  now  a  matter  of  public 
debate.  Take,  for  example,  a  railroad  corporation.  Its 
charter  does  not  simply  authorize  it  to  engage  in  the 
business  of  transportation,  but  it  gives  the  right  of  emi- 
nent domain.  If  it  needs  your  property  in  order  to  com- 
plete its  line,  it  has  the  right  to  take  it  by  condemnation 
proceedings.  In  other  words,  the  railroad  receives  a 
special  favor  from  the  State  because  of  the  service  it 
proposes  to  render.  When  it  is  ready  for  business  it  may 
not,  therefore,  rightfully  charge  what  it  pleases  and  say, 
if  people  don't  like  its  terms  they  can  buy  transportation 
elsewhere.  The  amount  of  transportation  to  be  done  in 
the  country  through  which  a  railroad  passes  is  limited, 
and  any  railroad  built  there  is  limited  to  the  business 
which  the  country  furnishes.  It  takes  a  long  time  and  a 
large  amount  of  money  to  build  and  equip  a  railroad, 
hence  in  many  cases  competition  cannot  be  had.  In  the 
case  of  a  street  railroad,  its  tracks  occupy  the  streets  and 
leave  no  room  for  competing  roads.  In  the  case  of  tele- 
phone, electric  light,  and  gas  companies,  the  streets  must 
be  torn  up  and  the  citizens  subjected  to  a  certain  amount 
of  inconvenience  and  loss  before  the  company  can  per- 
form any  service,  and  the  number  of  companies  which 
can  operate  within  a  given  district  is  limited  by  these 
and  other  considerations. 

But  a  life  insurance  corporation  secures  by  its  charter 
no  control  over  private  property  and  no  privileges  which 
are  not  free  to  all  life  companies.  It  claims  no  right  of 


The  Relation  of  the  State  to  Life  Insurance      231 

eminent  domain;  it  occupies  no  public  thoroughfare;  it 
strings  no  death-dealing  wires  overhead  or  underground ; 
it  digs  up  no  streets;  it  builds  no  gas  tanks;  it  makes  no 
dangerous  crossings ;  it  pollutes  no  atmosphere ;  its  opera- 
tions are  noiseless;  new  companies  are  readily  created 
and  no  monopoly  is  possible.  However  desirable  it  may 
be,  it  is  not  like  transportation,  or  light — something  that 
people  can't  live  without.  It  is  not  something  that  the 
whole  community  comes  to  depend  upon.  It  is  rather 
something  that  no  one  is  vitally  interested  in,  or  depen- 
dent upon,  except  those  who  voluntarily  engage  in  it, 
either  as  insurers  or  insured.  Except  in  its  general  bear- 
ing on  the  welfare  of  the  State,  it  is  more  like  a 
partnership  or  a  private  business— and  it  takes  corporate 
form  in  order  to  secure  strength,  effective  management 
and  perpetuity. 

The  activities  of  men,  both  privately  and  by  means  of 
corporations,  may  be  divided  into  two  great  classes — 
those  to  which  they  are  driven  by  necessity — by  hunger, 
by  lack  of  the  comforts  of  life,  and  by  the  desire  of  accu- 
mulation— and  those  which  have  their  motive  in  the 
higher  impulses — in  affection  and  in  the  sentiments  of 
duty,  justice  and  charity.  And  so  we  have,  on  the  one 
hand,  manufacturing  plants  and  public  service  corpora- 
tions, and  on  the  other,  schools,  libraries,  churches,  asy- 
lums, homes  for  the  aged — and  life  insurance  companies. 

In  order  to  make  the  picture  complete,  a  word  should 
be  said  with  respect  to  the  functions  of  life  insurance 
companies,  even  at  the  risk  of  stating  what  are  matters 
of  common  knowledge.  Life  Insurance  undertakes  to 
provide  for  those  periods  in  life  and  those  contingencies 
in  life  when  the  ordinary  means  fail — widowhood,  orphan- 
hood, old  age.  It  does  for  its  adherents  something  akin 
to  that  which  a  government  does  for  its  defenders — if 
they  die,  it  pensions  their  widows  and  orphans;  if  they 


232  Militant  Life  Insurance 

live  to  old  age  it  pensions  them.  Life  Insurance  raises 
the  standard  of  citizenship  by  preventing  the  poverty  of 
the  worthy,  and  by  checking  the  increase  of  the  depen- 
dent classes  which  are  a  burden  to  the  State.  Its  func- 
tions are  so  closely  allied  to  those  of  the  State  in  its  pro- 
tective aspects,  that  compulsory  insurance  has  for  twenty 
years  been  a  feature  of  German  Law,  and  an  Old  Age 
Pension  law  has  recently  been  enacted  by  the  British 
Parliament.  In  short,  Life  Insurance  encourages  and 
enables  people  to  do  for  themselves  and  for  those  depen- 
dent on  them  what  the  German  government  does  in  part, 
and  what  the  British  government  now  does  wholly — by 
taxation. 

The  State  of  New  York,  as  early  as  1840,  recognized 
the  altruistic  character  of  Life  Insurance  and  the  special 
service  it  renders  to  the  State,  by  enacting  that  it  should 
be  lawful  for  any  married  woman  to  cause  to  be  in- 
sured, for  her  sole  use,  the  life  of  her  husband,  and  mak- 
ing such  insurance  payable  to  her,  for  her  own  use,  free 
from  the  claims  of  the  representatives  of  her  husband,  or 
of  any  of  his  creditors,  up  to  and  including  such  an 
amount  as  might  be  purchased  by  an  annual  premium  of 
three  hundred  dollars.  In  case  of  her  prior  death  such 
insurance  might  be  made  payable  to  her  children.  The 
amount  of  insurance  thus  allowed  has  since  been  increased 
by  66  2-3%  (Act  of  1873) ;  and  a  similar  rule  prevails  in 
many  other  States  of  the  Union. 


Having  noted  the  class  of  corporations  to  which  life 
insurance  companies  belong,  and  the  function  of  such 
companies  as  related  to  the  welfare  of  the  State,  it  is  now 
time  to  inquire  what  sort  of  supervision  or  regulation  is 
necessary  and  appropriate. 

The  first  general  laws  passed  in  most  of  the  States 


The  Relation  of  the  State  to  Life  Insurance      233 

with  respect  to  life  insurance  companies  required  them  to 
make  annual  reports  to  some  officer  or  department  of  the 
State  government.  The  first  demand  of  the  State  was  for 
publicity,  and  a  large  part  of  the  legislation  of  all  the 
States  up  to  a  recent  period,  has  been  for  more  and  fuller 
publicity — publicity  in  a  form  that  would  show  the  legal 
right  of  the  companies  to  do  business,  the  amount  and 
character  of  the  business  done,  and  the  ability  of  the 
companies  to  carry  out  their  contracts.  To  this  end  re- 
ports have  been  required  according  to  certain  forms; 
standards  of  solvency  have  been  established,  including 
the  valuation  of  policy  liabilities  and  the  valuation  of 
securities  held;  and  examinations  by  public  officials  have 
been  provided  for.  While  publicity  would  naturally 
make  for  safety,  other  and  more  direct  measures  were 
taken  to  secure  safety:  Investments  were  limited  to  the 
better  class  of  securities;  a  deposit  of  securities  with  the 
State  was  required;  and  companies  that  were  insolvent 
according  to  established  standards  were  required  to  be 
wound  up. 

On  the  other  hand,  the  State  endeavored  to  secure 
fair  dealing  between  the  companies  and  the  insured.  One 
of  the  first  enactments  in  this  direction  was  the  non-for- 
feiture law  passed  by  Massachusetts  in  1861.  Although 
most  of  the  companies  allowed  a  surrender  value  in  case 
of  the  discontinuance  of  a  policy  after  it  had  been  several 
years  in  force,  with  a  single  exception  they  did  not  promise 
it  in  their  contracts ;  the  law  came  in  and  fixed  the  amount 
of  such  surrender  value  and  the  time  when,  and  the  form 
in  which,  it  should  be  available.  All  subsequent  laws 
regulating  the  lapse  or  forfeiture  of  policies  fall  under 
the  same  head.  Legislation  has  also  been  invoked  to  fix 
the  conditions  under  which  policies  may  be  contested  and 
what  shall  be  a  valid  defence.  It  has  taken  measures  to 
prevent  deception  in  the  character  of  contracts,  by  re- 


234  Militant  Life  Insurance 

quiring  that  no  misleading  name  shall  be  used  and  that 
the  policy  shall  contain  all  the  conditions  of  the  contract. 
It  has  declared  that  there  shall  be  no  discrimination  be- 
tween insurants  of  the  same  class  or  expectation  of  life, 
and  that  all  claims  and  judgments  must  be  paid  within  a 
specified  time.  Justice  is  not  to  be  denied,  nor  sold,  nor 
delayed. 


If  the  State  had  continued  to  rely  upon  publicity, 
upon  high  standards  of  investment  and  of  solvency,  and 
upon  the  use  of  standard  policy  provisions  in  such  special 
cases  as  seemed  to  require  the  interposition  of  the  State — 
Life  Insurance  would  have  been  effectively  supervised. 
The  State  and  the  companies  would  have  labored  to- 
gether in  developing  the  humane  and  altruistic  spirit, 
and  the  benefactions  of  Life  Insurance  would  have  con- 
tinued to  increase  in  a  healthy  ratio. 

But  other  counsels  prevailed  and  other  methods — in- 
volving other  principles — crept  in.  One  of  the  first  of 
these  was  unreasonable  deposit  laws.  In  April,  1851,  the 
State  of  New  York  enacted  that  every  life  company  doing 
business  in  the  State  should  deposit  with  the  Comptroller 
certain  designated  securities  to  the  amount  of  $100,000, 
to  be  held  in  trust  by  him  as  security  for  policy-holders. 
So  great  was  the  dissatisfaction  that  all  the  other-State 
companies  except  two  withdrew  from  New  York.*  The 
statute  also  provoked  retaliatory  legislation  on  the  part 
of  other  States  with  the  effect  that  some  New  York  com- 
panies felt  obliged  to  withdraw  from  other  States.  In 
June,  1853,  the  law  was  so  modified  as  to  permit  the  de- 
posit to  be  made  with  the  chief  financial  officer  of  the 
State  in  which  the  company  was  incorporated.  Modifica- 
tions of  the  retaliatory  laws  of  other  States  followed. 


•Barnes's  Consolidated  Reports,  Vol.  I,  page  859. 


The  Relation  of  the  State  to  Life  Insurance      235 

But  the  seed  of  distrust  had  been  sown,  and  the  harvest 
had  to  be  reaped.  The  new  insurance  of  1850  proved 
high-water  mark  for  nine  years.  Yet  so  great  was  the 
assurance  of  the  Comptroller  of  the  State  that  the  legisla- 
tion was  wise,  that  in  his  report  of  December  31,  1851,  he 
used  the  following  language : 

1  'The  law  of  last  Spring  was  as  well  considered  as 
was  practicable  under  the  pressure  of  other  legislative 
duties.  Its  execution,  thus  far,  has  unfolded  no  objec- 
tions that  appear  serious.  The  companies  which  have 
complied  with  the  provisions  of  the  law  do  not  perceive 
any  unexpected  difficulties  attending  it ;  and  if  the  Comp- 
troller may  be  permitted  in  view  of  his  short  experience 
of  its  operation  and  his  imperfect  knowledge  of  the  sub- 
ject, to  advance  an  opinion,  it  is  that  the  measure  is  a 
wise  and  a  just  one,  which  should  not,  certainly  at  pres- 
ent, be  departed  from  or  essentially  changed.* 

Perhaps  some  of  us  may  be  pardoned  if  we  hear  in  the 
statements  that  have  lately  come  from  Albany,  an  echo 
of  this  confident  but  shallow  assumption  of  half  a  century 
ago.  Let  us  hope  that  the  return  of  sanity  will  be  equally 
prompt  and  decisive! 

We  have  recently  seen  the  enactment  of  a  similar  law 
in  the  State  of  Texas,  except  that  instead  of  the  deposit 
being  limited  to  $100,000  in  high  grade  securities,  the 
amount  was  fixed  at  75%  of  the  reserve  fund  of  Texas 
policies,  and  the  securities  were  required  to  be  Texas 
securities.  As  a  result  twenty-one  life  companies  with- 
drew from  Texas  in  1907.  Thus  history  repeats  itself. 

In  1874  the  State  of  California  undertook  to  change 
the  status  of  all  life  companies  doing  business  in  the 
State  and  make  them  practically  California  companies. 
The  chief  agent  for  the  State  must  have  the  full  powers 


•Barnes's  Condensed  Reports,  Vol.  I,  page  654. 


236  Militant  Life  Insurance 

of  an  executive  officer,  all  policies  issued  upon  the  lives 
of  citizens  of  California  must  be  issued  in  the  State  and 
be  subject  to  California  laws  and  no  other;  the  State 
Courts  were  to  have  exclusive  jurisdiction  in  all  cases  of 
litigation;  and  every  company  must  pay,  on  surrender  of 
a  policy,  three-fourths  of  the  reserve  value  thereof  in 
cash.  Twenty-nine  companies  withdrew  from  the  State 
on  the  day  the  law  took  effect.  It  took  four  years  in  this 
case  to  cure  the  State  of  its  folly;  but  proper  principles 
of  regulation  reasserted  themselves  in  1878,  and  the  com- 
panies returned  to  California. 

Wisconsin  has  recently  fixed  the  maximum  premium 
which  a  life  company  may  charge,  and  Missouri  has 
placed  a  limit  upon  the  amount  of  salary  that  may  be 
paid  to  an  executive  officer.*  These  are  of  course  flagrant 
violations  of  the  right  of  contract,  but  they  pale  into 
insignificance  in  comparison  with  the  so-called  "Arm- 
strong Laws"  enacted  in  New  York  in  1906.  Other 
States  have  only  violated  a  few  of  the  principles  which 
should  control  the  regulation  of  life  companies ;  New  York 
has  broken  the  whole  decalogue.  In  their  zeal  and  fury 
for  reform  the  legislators  of  the  Empire  State  have  abol- 
ished the  right  of  contract,  taken  away  the  discretion  of 
trustees  with  respect  to  the  amount  of  surplus  a  company 
may  hold  and  how  it  shall  be  distributed,  limited  the 
business  a  company  may  do,  and  fixed  the  compensation 
of  a  large  proportion  of  its  employees.  Although  much 
has  already  been  said  and  written  respecting  the  recent 
legislation  in  New  York,  I  believe  that  neither  the  public 
nor  the  companies  themselves  have  yet  opened  their  eyes 
to  the  enormity  of  it  with  respect  to  the  principles  which 
it  violates. 

Take  the  Standard  Policy  forms — about  the  least  ob- 
jectionable part  of  this  legislation.  The  Standard  Policy 

*  Repealed  in  1911. 


The  Relation  of  the  State  to  Life  Insurance      237 

is  a  good  policy.  Why  shouldn't  it  bet  The  Committee 
gathered  up  and  combined  what  they  considered  the  best 
features  of  all  the  policies  of  all  the  companies — features 
which  are  the  result  of  more  than  sixty  years  of  experi- 
ence, and  many  of  which  have  been  introduced  within 
twenty-five  years.  They  added  absolutely  nothing  to  life 
insurance  practice — they  were  indebted  to  the  companies 
for  every  line  of  the  Standard  Policy.  But  suppose  the 
State  had  enacted  a  Standard  Policy  twenty-five  years 
ago — life  policies  would  now  be  written  without  many 
of  the  valuable  features  which  they  contain.  Suppose 
the  Interstate  Commerce  Commission,  in  its  zeal  to  regu- 
late railroads,  should  decree  a  standard  locomotive,  or  a 
standard  car!  Suppose  this  had  been  done  twenty-five 
years  ago !  Suppose  the  government  were  to  standardize 
the  first  successful  airship  and  taboo  or  forbid  all  others ! 
Will  wisdom  die  with  the  present  generation?  Is  there 
to  be  no  room  for  development?  Has  the  life  policy 
reached  perfection  as  to  form? 

If  so,  by  what  process  was  that  wonderful  result 
achieved?  Was  it  the  product,  to  any  considerable  ex- 
tent, of  State  supervision?  Of  any  wisdom  in  any  Insur- 
ance Department?  Certainly  not.  Yet  we  have  this 
amazing  situation:  First,  the  State  assumed  that  the 
public  was  in  such  peril  over  the  policy  forms  in  use  that 
it  must  go  to  a  doubtful  extreme  in  order  to  protect  the 
public.  Second,  it  wrote,  in  its  wisdom,  a  correct  form 
of  policy  in  order  to  protect  the  public.  Third,  in  writing 
a  correct  form,  it  adopted  in  large  part  the  very  forms  it 
had  already  declared  a  menace  to  the  intending  insurant. 
All,  therefore,  that  the  State  accomplished  was  first, 
a  heavy  and  continued  expense,  and,  second,  an  effective 
termination  of  the  methods  by  which  this  excellence  of 
form  had  been  reached. 

It  will  be  said  in  reply  that  the  New  York  law  allows 


238  Militant  Life  Insurance 

other  forms  of  policy  subject  to  the  approval  of  the  Su- 
perintendent of  Insurance,  after  a  public  hearing.  All 
progress,  therefore,  and  all  freedom  in  this  matter,  de- 
pends upon  the  Superintendent.  If  one  company  asks 
for  a  change  and  many  companies  oppose  it — what  is  his 
decision  likely  to  be  ?  Yet  this  was  exactly  the  condition 
of  affairs  when  non-forfeiting  policies  were  first  proposed 
in  Massachusetts  in  1859-60,  with  this  exception — that 
the  Commissioner  favored  the  change  and  all  the  com- 
panies opposed  it.  In  New  York  the  subject  was  fully 
discussed  by  representatives  of  the  companies  in  conven- 
tion assembled  in  May,  1860,  and  an  adverse  report 
adopted.  Three  months  later  a  New  York  company  issued 
a  non-forfeiting  policy,  devised  by  itself  and  put  on  the 
market  without  official  constraint  and  against  the  judg- 
ment of  other  companies.  What  was  the  result?  Within 
a  year  all  the  companies  were  tumbling  over  each  other 
with  offers  of  non-forfeiting  policies.  Practically  the 
same  thing  occurred  when  incontestable  policies  were  first 
proposed,  except  that  it  took  longer  to  establish  the  cus- 
tom, and  again  when  all  conditions  as  to  residence,  occu- 
pation, travel  and  manner  of  death  were  eliminated  from 
life  policies.  The  present  world-wide  policy,  with  practi- 
cally no  conditions  but  the  due  payment  of  premiums, 
with  its  wonderful  adaptability  to  human  needs  and 
changing  circumstances,  is  the  fruit  of  free  competition 
between  the  companies  during  the  past  sixty  years.  What 
progress  would  there  have  been  under  a  standard  policy? 
The  present  law  with  respect  to  a  standard  policy  denies 
freedom  of  contract,  which  is  a  condition  of  liberty  itself, 
and  prevents  competition,  which  is  essential  to  justice 
and  to  economic  progress. 


Section  87  of  the  New  York  Insurance  Law,  which 
fixes  the   contingency  reserve  that   life   insurance   com- 


The  Relation  of  the  State  to  Life  Insurance      239 

panics  may  hold,  is  the  most  amazing  piece  of  legislation 
ever  put  on  the  statute  books  of  the  State.  It  limits  the 
amount  of  this  fund  by  a  sliding  scale,  beginning  with 
20%  for  the  smaller  companies  and  ending  with  5%  for 
companies  with  over  seventy-five  millions  of  reserve  lia- 
bilities, and  requires  annual  distributions,  as  earned, 
upon  each  policy  issued  after  January  1,  1907. 

It  is  necessary  to  go  back  to  first  principles— the  very 
a-b-c  of  business — in  order  to  appreciate  the  mischievous 
character  of  this  statute.  What  is  the  nature  and  the 
function  of  surplus  in  any  business?  It  is  the  amount 
shown  by  the  balance  sheet  in  excess  of  liabilities  and  its 
function  is  to  provide  for  contingencies  and  thus  assure 
the  safety  of  the  business.  In  every  other  business — and 
in  Life  Insurance  until  1906 — a  large  surplus  is  con- 
sidered a  sign  of  conservative  management.  I  think  the 
statute  book  of  New  York  will  be  searched  in  vain  for 
another  instance  where  the  State  has  sought  to  limit  the 
surplus  of  a  corporation.  In  all  previous  legislation  con- 
cerning moneyed  institutions  the  State  has  sought  to 
secure  safety.  This  statute  limits  the  margin  of  safety. 

It  not  only  limits  the  margin,  but  it  makes  this  margin 
different  in  different  companies.  It  is  partial  legislation 
— it  is  class  legislation.  It  enacts  such  inequalities  and 
absurdities  as  these — that  for  a  one  hundred  thousand 
dollar  liability  a  surplus  of  twenty  per  cent.,  or  ten 
thousand  dollars,  whichever  is  greater,  is  necessary;  for 
a  million  dollar  liability  a  surplus  of  only  fifteen  per  cent, 
is  necessary ;  for  a  fifteen  million  dollar  liability  a  surplus 
of  only  ten  per  cent,  is  necessary ;  while  for  a  liability  of 
seventy-five  million  dollars  and  upwards  a  surplus  of  only 
five  per  cent,  is  sufficient.  The  State  has  fixed  the  stand- 
ard of  a  Hfe  company's  liabilities  under  its  policies;  it 
has  declared  in  what  kinds  of  securities  its  funds  shall 
be  invested ;  but  it  does  not  guarantee  that  the  death-rate 


240  Militant  Life  Insurance 

assumed  will  not  be  exceeded,  nor  that  the  interest  rate 
assumed  during  the  whole  existence  of  its  contracts  will 
be  earned,  nor  that  the  value  of  its  securities  will  remain 
stable.  And  when  the  larger  companies,  whose  bene- 
ficiaries number  millions,  seek  to  guard  against  adverse 
contingencies  of  every  kind  by  a  reasonable  percentage 
of  surplus,  the  State  steps  in  and  says : — ' '  Divide  up  and 
pay  out  all  but  five  per  cent,  on  your  liabilities  even  when 
prices  of  securities  are  highest!" 

Is  this  a  wise,  or  proper,  or  reasonable  exercise  of  the 
regulating  power  of  the  State?  The  only  attempt  ever 
made  before  to  limit  the  amount  of  surplus  of  a  life  com- 
pany, was  made  in  Massachusetts  twenty  years  ago;  and 
then  a  proposition  to  make  the  limit  ten  per  cent,  of  lia- 
bilities was  voted  down.  The  life  insurance  charters 
granted  by  the  State  of  New  York  prior  to  the  enactment 
of  the  first  general  insurance  law,  and  the  early  charters 
taken  out  under  this  law,  sought  to  provide  for  the 
strength  and  safety  of  the  companies,  either  by  deferred 
dividends  payable  at  the  death  of  the  insured,  or  by 
scrip  dividends,  the  redemption  of  which  was  deferred. 
It  remained  for  the  Legislature  of  1906  to  limit  the 
amount  of  what  is  essential  to  the  safety  of  a  company, 
to  compel  an  annual  distribution,  and  to  prohibit  the 
issue  of  policies  with  longer  distribution  periods. 


Section  97  of  the  New  York  Insurance  Law,  limiting 
expenses,  should  be  entitled  "An  Act  to  fix  the  wages  or 
compensation  of  life  insurance  agents,  examining  physi- 
cians, inspectors,  agency  directors,  cashiers,  and  of  clerks, 
stenographers  and  office  boys  engaged  in  the  business  of 
Life  Insurance,  and  to  fix  them  Low".  We  have  heard 
much  in  this  country,  and  are  hearing  much  now,  about 
laws  to  favor  men  who  work — laws  that  will  raise  wages 


The  Relation  of  the  State  to  Life  Insurance      241 

and  raise  the  standard  of  living  above  that  of  other 
countries,  but  I  think  this  is  the  first  attempt  to  lower 
wages  by  law — or  to  fix  by  law  a  maximum  wage  for 
any  large  body  of  workers.  The  law  not  only  prescribes 
a  maximum  amount  that  may  be  paid  by  a  life  company 
for  new  business,  but  it  goes  farther  and  prescribes  how 
this  amount  may  be  parceled  out,  and  when  it  may  be 
paid.  It  has  already  reduced  the  compensation  of  a  body 
of  men  whose  work  is  most  helpful  to  the  State,  and  has 
driven  a  large  number  of  them  out  of  business. 

You  will  notice  that  this  section  involves  a  very  dif- 
ferent principle  from  that  involved  in  a  law  fixing  a  rail- 
road rate,  or  the  price  of  gas  or  of  electricity.  There  the 
price  of  a  commodity  is  fixed;  here  the  price  of  labor  is 
fixed.  To  make  a  parallel  to  Section  97  in  the  field  of 
transportation,  the  State  would  need  to  fix  a  maximum 
amount  to  be  expended  in  wages  for  ticket  agents,  con- 
ductors, freight  agents,  engineers,  firemen  and  trainmen. 
To  make  a  parallel  in  the  field  of  manufactures  it  would 
be  necessary  to  fix  the  maximum  percentage  of  the  value 
of  the  manufactured  product  to  be  expended  for  labor. 
Every  one  can  see  not  only  how  unwise  such  laws  would 
be  from  an  economic  point  of  view,  but  also  how  unwise, 
how  unjust  and  how  impolitic  they  would  be.  They  are 
equally  unwise,  unjust  and  impolitic  in  the  field  of  life 
insurance. 

Should  there  be  no  limit,  then,  to  the  expenses  of  a  life 
company?  That  would  not  follow  as  a  necessary  result 
of  the  repeal  of  Section  97.  The  life  companies  fix  a 
maximum  price  for  insurance.  That  price  is  determined 
by  three  factors,  the  assumed  mortality  rate,  the  assumed 
interest  rate,  and  the  loading  for  expenses  and  contingen- 
cies. The  companies  have  a  right  to  say,  everywhere 
except  in  Wisconsin,  at  what  price  they  will  undertake 
to  furnish  insurance;  and  the  State  has  a  right  to  see  to 


242  Militant  Life  Insurance 

it  that  they  carry  out  in  good  faith  the  plans  of  insurance 
they  adopt.  These  plans  involve  the  setting  aside  of 
certain  amounts  every  year  to  insure  the  ultimate  fulfil- 
ment of  their  contracts,  and  this  the  State  secures  by  its 
yearly  valuation  of  policy  liabilities  and  its  insistence  on 
definite  policy  reserves.  Why  shouldn't  the  State  stop 
there  and  leave  the  question  of  expenses  and  of  surplus 
to  the  companies  themselves?  The  managers  of  every 
company  will  be  interested  first  in  the  company's  safety, 
and,  second,  in  making  large  returns  to  policy-holders  in 
order  to  secure  new  business. 

Section  97  does  indeed  permit  a  total  expense  equal  to 
the  loading  of  its  premiums  together  with  certain  esti- 
mated mortality  gains  and  a  small  charge  for  investment 
expenses.  But  see  what  absurdities  this  involves.  First, 
it  puts  a  premium  on  inefficiency  and  a  handicap  on  the 
efficient  company.  A  company  may  sit  down  and  do 
nothing,  and  it  is  allowed  to  spend  all  the  loading  on  all 
its  premiums;  if  it  insures  additional  people,  it  may  only 
spend  the  additional  loading  on  the  new  premiums,  to- 
gether with  the  estimated  mortality  gains  on  the  same. 
In  short,  new  business  must  cost  no  more  than  old  busi- 
ness except  its  estimated  mortality  gains.  The  law  is 
very  severe  upon  estimated  results  of  maturing  policies, 
but  is  itself  guilty  of  making  estimates  upon  mortality 
savings  and  allowing  companies  to  spend  them  in  advance. 

There  is  another  grave  inconsistency  in  the  law  which 
should  be  pointed  out  just  here.  Section  88,  which  regu- 
lates the  surrender  value  of  lapsed  or  forfeited  policies, 
allows  a  certain  surrender  charge — that  is  to  say,  a  com- 
pany is  allowed  to  retain  a  certain  part  of  the  funds 
which  it  holds  as  a  liability  under  a  policy,  at  surrender 
—when  of  course  all  liability  on  account  of  it  ceases.  This 
surrender  charge,  therefore,  adds  so  much  to  surplus.  In 
all  discussions  of  the  subject  of  surrender  charge  it  is 


The  Relation  of  the  State  to  Life  Insurance      243 

justified  on  the  ground  that,  if  a  policy-holder  leaves  the 
company  of  his  own  free  will  he  must  make  good  to  the 
company  the  loss  of  a  healthy  member.  In  other  words, 
the  surrender  charge  is  supposed  to  be  sufficient  to  put  a 
new  member  in  place  of  the  one  who  withdraws,  or  to 
provide  for  the  increased  mortality  which  results  from 
the  withdrawal  of  healthy  members.  But,  while  the  law 
provides  a  proper  surrender  charge,  it  does  not  allow  a 
company  to  use  it  for  either  of  the  purposes  for  which  it 
is  retained — it  may  not  use  the  surrender  charge  either 
to  secure  new  business  or  to  increase  its  surplus  above 
the  limit  fixed  by  law — it  must  pay  it  out  in  dividends. 

The  claim  is  made  in  behalf  of  Section  97  that  every 
year's  business  should  take  care  of  itself.  The  claim  as 
made  is  fallacious,  and  is  utterly  opposed  to  the  whole 
plan  of  Life  Insurance  on  the  legal  reserve  plan.  The 
assumption  leads  straight  to  assessmentism.  Real  Life 
Insurance  is  not  year  by  year  insurance,  but  insurance 
for  a  term  of  years  or  for  life,  with  premiums  calculated 
for  the  whole  term.  The  cost  for  mortality  is  not  the 
same  in  any  two  years,  but  the  premium  is  the  same 
every  year.  The  cost  of  administration  is  not  the  same 
every  year — is  always  larger  in  the  first  year  than  in 
other  years — but  the  loading  for  expenses  is  always  the 
same.  Insurance  is  a  matter  of  averages  first,  last  and 
all  the  time, — averages  on  lives,  averages  on  ages,  aver- 
ages on  years,  averages  on  expenses — and  when  you  break 
up  the  integrity  of  the  system  and  attempt  to  administer 
it  by  piecemeal  you  only  mar  it  and  maim  it. 

There  are  also  several  general  and  entirely  logical 
reasons  why  the  companies — especially  the  mutual  com- 
panies— should  be  freed  from  the  shackles  which  Section 
97  imposes.  The  State  has  prescribed  in  great  detail  the 
contracts  they  may  issue.  It  has  declared  that  they  shall 
pay  dividends  annually — which  makes  it  possible  for 


244  Militant  Life  Insurance 

every  policy-holder  to  know  exactly  what  his  insurance 
costs.  It  has  legislated  out  of  office  all  the  trustees  of 
mutual  companies  and  held  an  election  for  new  trustees 
under  its  own  auspices.  It  has  placed  the  companies  in  the 
hands  of  the  insured  by  its  own  methods.  It  has  provided 
for  full  publicity  as  well  as  for  an  annual  accounting. 
Now  if  the  companies  are  to  be  mutual  in  any  sense  what- 
ever— if  they  are  to  be  allowed  to  manage  their  own 
affairs  within  the  limits  of  the  contracts  which  they  are 
required  to  issue — then  the  trustees,  as  the  representa- 
tives of  the  insured,  should  be  allowed  authority  to 
manage  the  business  within  the  general  limits  which  I 
have  suggested.  Otherwise  the  State  becomes  a  meddler 
and  an  oppressor. 


Section  96  of  the  Insurance  Law  limits  the  new  busi- 
ness which  New  York  companies  may  do  by  a  sliding 
scale  similar  to  that  by  which  Section  87  limits  the 
amount  of  contingency  reserve  which  companies  may 
hold.  In  its  practical  application  it  allows  the  smallest 
company  to  write  an  amount  equal  to  30%  of  its  busi- 
ness in  force,  and  the  largest  company  an  amount  equal 
to  7%%.  Here  again  I  beg  leave  to  call  attention  to  the 
principles  of  equality  and  right  which  are  violated.  The 
companies  of  proved  efficiency  are  handicapped;  the 
laggards  are  favored.  The  Great  Teacher  declared  as  a 
general  principle  that  the  man  who  made  good  use  of  his 
opportunities  should  be  given  larger  opportunities;  but 
our  legislators  have  reversed  the  Scripture  and  given  the 
greater  opportunities  to  those  who  have  hitherto  accom- 
plished little.  Having  regulated  every  step  of  the  busi- 
ness from  the  form  of  contract  to  the  manner  of  its  pay- 
ment, the  State  goes  still  farther  and  limits  the  amount 
of  business  a  company  may  do  in  any  form  and  at  any 


The  Relation  of  the  State  to  Life  Insurance      245 

cost.  Beyond  a  certain  fixed  point  it  abolishes  competi- 
tion, which  in  other  businesses  is  relied  upon  to  hold  the 
balance  true  between  producer  and  consumer. 


Let  us  recapitulate  now  a  few  of  the  violations  of 
well-established  principles  perpetrated  in  the  Insurance 
Act  of  1906 : 

1st.  The  fossilization  of  the  policy  form  and  the  re- 
moval of  all  practicable  methods  for  its  further 
improvement.  The  policy  form  of  New  York 
State  is  now  almost  a  dogma; 

2d.  A  reversal  of  all  previous  legislation  which  aimed 
to  secure  solvency  above  everything  else,  and  an 
enactment  which,  if  it  remains,  may  work  incal- 
culable disaster; 
3d.  A  flat  denial  of  the  right  of  contract; 

4th.  Fixing  a  maximum  wage  by  law ; 

5th.  Destruction  of  individual  initiative  through  laws 
which  explicitly  limit  what  men  may  legitimately 
accomplish  in  a  calendar  year; 

6th.  Destruction  of  great  plants  which  were  doing  a 
thoroughly  beneficent  work; 

7th.  Class  legislation  which  openly  aimed  to  handicap 
certain  companies  and  help  others. 

What  now  is  the  real  test  of  excellence  in  such  a  busi- 
ness ?  What  is  the  successful  company  ?  —  the  com- 
pany that  most  benefits  the  $tate?  Surely  not  the  com- 
pany that  merely  takes  out  a  charter,  offers  a  good  con- 
tract and  insures  a  few  hundred  or  a  few  thousand  people 
— no  matter  how  small  may  be  the  cost  of  administration. 
The  successful  life  company  is  the  company  that  insures 
many  lives.  This  is  the  company  that  benefits  society— that 


246  Militant  Life  Insurance 

benefits  the  State.  This  is  what  the  State  is  interested  in 
having  done.  This  is  the  company  the  State  should  en- 
courage— and  not  put  obstacles  in  its  way.  From  the 
standpoint  of  the  State  the  good  company  is  the  efficient 
company.  The  State  need  not  take  cognizance  of  the  cost 
of  insurance  any  more  than  it  needs  to  take  cognizance 
of  the  cost  of  the  product  of  any  other  industry — compe- 
tition and  the  natural  desire  to  buy  in  the  cheapest  mar- 
ket will  ultimately  take  care  of  the  question  of  cost. 

Take  a  concrete  case.  The  Equitable  Life  Assurance 
Society  was  organized  in  July,  1859,  and  the  Home  Life 
was  organized  in  April,  1860.  On  December  31,  1906— the 
latest  date  for  which  details  are  available — the  Equitable 
had  in  force  upon  the  lives  of  citizens  of  New  York  99,176 
policies  insuring  $293,773,869,  and  the  Home  had  in  force 
upon  the  lives  of  citizens  of  New  York  6,040  policies  in- 
suring $12,743,213.  During  1906  the  Equitable  paid  death- 
claims  in  the  State  amounting  to  $3,977,870,  and  the  Home 
paid  death-claims  in  the  State  amounting  to  $150,096.  In 
other  words  the  Equitable  was  more  than  twenty-three 
times  as  efficient  in  furnishing  life  insurance  to  the  people 
of  the  State  as  was  the  Home.  I  take  these  two  com- 
panies because  they  were  organized  about  the  same  time, 
and  they  afford  an  example  of  a  large  company  whose 
management  has  been  under  criticism,  and  of  a  small 
company  whose  management  has  received  cordial  ap- 
proval. Without  assuming  to  know  how  much  may  have 
been  deserved  in  either  case,  but  assuming — what  is  un- 
questionably true — that  both  have  carried  out  their  con- 
tracts and  that  faults  of  administration  in  the  larger 
company  have  been  corrected — I  ask  which  of  these  two 
companies  has  been,  is  now,  and  is  likely  to  be  for  many 
years  to  come,  of  greater  service  to  the  State?  Remem- 
bering that  it  is  the  duty  of  the  State  to  protect  men  in 
the  exercise  of  their  rights — even  in  the  right  to  insure 


The  Relation  of  the  State  to  Life  Insurance      247 

where  they  please,  and  to  pay  the  cost,  whatever  it  may 
be — is  it  right,  or  fair  for  the  State  to  hamper  and  limit 
the  large  company  more  than  it  does  the  small  one  ?  And, 
considering  what  both  have  done,  are  doing,  and  will  con- 
tinue to  do  for  the  State,  is  it  right  or  just  or  politic  to 
hamper  and  limit  the  activities  of  either? 

In  just  one  case,  so  far  as  I  have  been  able  to  ascer- 
tain, has  the  Empire  State  heretofore  shown  fear  of  a 
large  corporation.  The  first  life  insurance  charter  granted 
by  the  State  was  granted  in  1830,  to  the  New- York  Life 
Insurance  and  Trust  Company,  which  was  authorized  to 
do  both  a  life  insurance,  and  a  trust,  business.  Four  years 
later  the  Legislature  seems  to  have  had  an  attack  of  hys- 
teria with  respect  to  large  corporations,  for  it  enacted 
that  the  company's  deposits  should  never  exceed  five 
million  dollars,  and  that  its  loans  should  never  exceed  six 
million  dollars, — except  such  additions  as  might  be  made 
by  moneys  deposited  by  order  of  court.  This  restriction 
was  not  removed  until  1872.  Five  million  dollars  seemed 
a  very  large  sum  to  the  legislators  of  1834 — what  might 
not  a  company  do  if  it  had  more!  But  " large "  and 
" small"  are  only  relative  terms,  and  the  large  corpora- 
tion of  to-day  is  dwarfed  by  the  larger  corporation  of 
to-morrow.  The  man  whose  ideals  are  low — who  limits 
his  achievements  to  that  which  is  easy  of  accomplishment 
— has  already  begun  to  deteriorate  in  moral  fibre ;  and  the 
State  that  limits  a  business  beneficent  in  character  has 
entered  upon  the  same  road. 


Wendell  Phillips  in  one  of  his  matchless  orations  says, 
there  is  in  every  country  a  precipice  along  whose  brink 
thousands  of  people  continually  walk,  and  the  rise  of  a 
cent  a  pound  in  the  price  of  bread  pushes  more  or  less  of 
them  over  into  the  abyss.  Along  that  precipice  Life  Insur- 


248  Militant  Life  Insurance 

ance  is  continually  building  a  wall ;  between  it  and  millions 
of  families  Life  Insurance  is  continually  making  a  widening 
space.  Every  man  who  is  insured  is  a  co-worker  with 
every  other  insured  man  in  keeping  the  future  generation 
from  the  miseries  of  the  yawning  gulf  of  poverty  which 
is  never  very  far  away.  Every  life  company  that  secures 
a  charter  from  the  State  to  do  a  life  insurance  business 
is  under  obligation  to  benefit  the  State  by  the  Insurance 
of  as  many  lives  as  possible.  In  1874  about  three  persons 
in  each  100  of  the  population  of  New  York  State  were 
insured.  In  1906  about  eight  in  each  100  were  insured.* 
Is  not  the  State  as  a  whole  benefited  by  the  change  ?  Are 
not  the  three  who  were  originally  insured  better  off  by 
the  addition  of  the  five?  Is  there  no  such  thing  as  the 
solidarity  of  the  race? — no  such  thing  as  a  community  of 
interest  in  modern  society? — no  such  thing  as  being  bene- 
fited by  a  neighbor's  prosperity?  If  not,  then  the  Insur- 
ance Department  of  the  State  should  change  its  motto, 
and  in  place  of  the  legend — "Bear  ye  one  another's  bur- 
dens", it  should  inscribe  over  its  doors  and  upon  its 
archives  the  motto  of  a  savage  individualism — "Every 
man  for  himself!"  If  a  large  life  insurance  company  is 
a  thing  to  be  repressed,  then  the  Empire  State  itself  should 
tear  from  its  coat  of  arms  the  imperial  word  ' '  Excelsior ' ' 
and  inscribe  in  its  place  something  that  shall  eulogize  small 
achievements. 

It  is  because  I  do  not  believe  in  any  such  permanent 
deterioration  of  civic  virtue  or  of  statesmanship,  that  I 
believe  in  the  early  amendment  or  absolute  repeal  of  these 
laws.  Civilization  never  turns  permanently  backward 
toward  lower  ideals  or  more  meagre  achievements.  On 
the  other  hand,  it  does  not  usually  progress  in  a  straight 
line.  Its  course  is  rather  like  that  of  the  great  Mississippi, 

*If  industrial  policies  are  included  nearly  half  of  the  entire  popu- 
lation is  insured. 


The  Relation  of  the  State  to  Life  Insurance      249 

whose  devious  windings  take  its  waters  over  almost 
double  the  actual  distance  between  two  points,  but  they 
none  the  less  surely  reach  the  Gulf  and  the  sea.  Life 
insurance  will  have  to  contend  with  ignorance  and  preju- 
dice, with  narrowness  and  obstinacy,  and  with  the  fear 
of  small  minds;  but  it  will  triumph,  because,  more  than 
any  other  great  business,  it  stands  for  the  integrity  and 
the  upbuilding  of  the  family,  which  is  the  foundation 
of  the  State  and  the  consummate  flower  of  citizenship. 

NOTE. — For  changes  since  made  in  the  Insurance  Law,  see  foot 
notes  to  address  on  "New  York  State  and  Life  Insurance  Legislation." 


INSURANCE  SUPERVISION  AND 
NATIONAL  IDEALS 


A  PLKA  FOB  FEDERAL  SUPEBTISION  OF  INTERSTATE  INSUBANOE  DELIYEBED  BEFORE 

THE  STUDENTS  OF  THE  UNIVERSITY  OF  MISSOURI,  AT 

COLUMBIA,  Mo.,  FEBRUARY  16,  1909 


twenty-five  years  what  may  be  called 
the  "  insurance  principle "  has  come  to  be 
a  notable  factor  in  the  traffic,  credits,  com- 
merce and  the  family  life  of  this  country. 
Invited  by  trunk-line  railroads,  the  tele- 
graph, the  telephone  and  the  welcome  of  a 
homogeneous  people,  the  tendency  of  all 
our  activities  has  been  to  expand.  Insur- 
ance has  kept  pace  with  the  opportunity. 
It  now  has,  through  its  various  forms,  relations  with  sub- 
stantially every  man,  woman  and  child  in  the  Republic, 
and  has  large  international  relations  as  well.  It  operates 
everywhere  under  governmental  supervision.  In  this  coun- 
try alone  it  must  obey  the  behests  of  46  different  Legisla- 
tures, each  of  which  claims  sovereign  authority  not  only 
over  its  activities  in  that  particular  State,  but,  in  effect, 
over  all  its  activities  throughout  the  world.  A  mere  state- 
ment of  the  situation  prepares  the  mind  for  the  confusion 

260 


Insurance  Supervision  and  National  Ideals        251 

and  injustice  which  characterize  insurance  supervision  as 
it  exists  to-day. 

It  is  a  principle  in  physics  that  two  bodies  cannot  occupy 
the  same  space  at  the  same  time.  The  Great  Teacher  said : 
"No  servant  can  serve  two  masters.  *  *  *  Ye  cannot 
serve  God  and  Mammon."  The  problem  which  faces  the 
management  of  an  active  insurance  company  to-day  is,  how 
may  it  profitably,  effectively  and  peacefully  serve  forty- 
six  masters.  The  problem  is  insolvable.  Under  the  present 
practice  of  insurance  supervision,  there  is  no  remedy.  But 
there  is  elsewhere  a  remedy,  and,  to  many  people,  it  seems 
to  be  the  only  remedy,  viz.,  Federal  supervision  of  interstate 
insurance. 

I  by  no  means  think  that  Federal  supervision  would 
bring  in  the  millennium,  but  it  would  be  a  long  step  away 
from  the  chaotic  and  destructive  tendencies  which  have 
developed  under  the  existing  plan.  Is  Federal  supervision 
possible  ?  As  against  the  decisions  of  the  Supreme  Court- 
made  not  once  but  several  times— is  there  any  probability  of 
such  relief  ?* 

Relief  through  an  amendment  to  the  Constitution  of  the 
United  States  would  be  effective,  but  that  is  practically  un- 
attainable and  is  probably  unnecessary. 

Is  there  not  a  great  deal  in  the  history  of  the  nation,  in 
the  development  of  national  sentiment,  in  the  development 
of  national  ideals,  since  the  Constitution  was  adopted,  which 
foreshadows  not  only  the  probability  but,  under  an  in- 
creasing necessity,  the  certainty  that  interstate  insurance 
will  ultimately  come  under  Federal  control?  I  think  there 
is.  I  ask  you  now  to  consider  that  probability. 

President-elect  Taft  recently  called  attention  to  some  of 
the  great  virtues  of  the  Constitution,  namely:  it  is  brief, 
general  in  its  terms,  and  obviously  constructed  so  that  the 


•Paul  v.  Virginia,  8  Wallace,  168;  Hooper  v.  California,  155  U.  S., 
646;  Cravens  v.  New-York  Life  Ins.  Co.,  176  U.  S.,  962. 


252  Militant  Life  Insurance 

powers  granted  to  the  general  government  could  be  de- 
veloped and  determined  as  the  nation  developed.  This,  as 
a  matter  of  fact,  is  what  has  happened. 

It  is  perfectly  clear  to  one  who  studies  the  history  of  the 
nation  under  the  Constitution,  that  but  for  the  wisdom  of 
the  great  men  who  interpreted  that  immortal  instrument 
during  the  early  years  of  its  operation,  national  development 
might  have  taken  on  a  form  that  would  have  defeated  the 
purposes  of  the  men  who  planned  it.  It  is  probable  that 
we  as  a  people  owe  almost  as  much  to  Marshall,  the  great 
Chief  Justice,  who  gave  the  Constitution  its  national  mean- 
ing, as  to  the  men  who  drafted  it.  The  doctrine  which 
Marshall  laid  down,  which  was  later  on  reaffirmed,  which 
has  now  come  to  be  perhaps  as  fixed  in  its  meaning  as  the 
Constitution  itself,  is  substantially  this : 

"The  action  of  the  general  government  should  be  ap- 
plied to  all  the  external  concerns  of  the  nation,  and  to  those 
internal  concerns  which  affect  the  States  generally;  while  to 
the  States  is  reserved  the  control  of  those  matters  which 
are  completely  within  a  particular  State,  which  do  not  affect 
other  States,  and  with  which  it  is  not  necessary  to  interfere 
for  the  purpose  of  executing  some  of  the  general  powers  of 
the  government."* 

Many  of  the  problems  which  have  arisen  since  the  adop- 
tion of  the  Constitution  involve  the  question  of  whether 
it  is  necessary  for  the  general  government  to  " interfere" 
for  the  purpose  of  executing  some  of  its  general  powers.  Is 
it  necessary  now,  is  it  likely  to  become  increasingly  necessary 
that  the  government  should  interfere  in  insurance  for  the 
purpose  of  executing  some  of  its  general  powers  ? 

I  speak,  of  course,  as  a  layman.  I  shall  not  attempt  to 
make  what  may  be  called  a  legal  argument.  I  speak  as  one 
having  close  relations  to  an  interest  which  involves  people 
in  every  State  in  the  Union,  and  in  nearly  every  country  of 


*Gibbons  v.  Ogden,  9  Wheaton,  1. 


Insurance  Supervision  and  National  Ideals        253 

the  civilized  world.  I  speak  as  a  practical  man,  dealing 
with  one  of  those  situations  which  make  the  lawyers  now  and 
then  understand,  and  make  even  the  Courts  understand, 
that  laws  and  courts  and  constitutions,  exist  for  the  people, 
that  the  people  do  not  exist  for  the  benefit  of  institutions. 

In  order  to  consider  what  the  probabilities  of  Federal 
supervision  are,  it  will  be  profitable  to  review  briefly  some 
of  the  things  that  have  happened  in  the  course  of  our  na- 
tional development. 

You  understand,  of  course,  that  the  radical  difference 
between  government  as  it  existed  under  the  old  Confedera- 
tion and  government  as  it  has  grown  up  under  our  Consti- 
tution is  this:  The  Confederation  was  strictly  a  union  be- 
tween independent  States  acting  as  States;  our  present 
government  is  a  union  between  States  in  which  the  central 
government  acts  directly  upon  the  individual  citizen,  and 
not  upon  the  States  composing  the  government.  This  is 
supposed  to  be  our  great  contribution  to  the  science  of 
government.  There  is  a  sharp  difference  of  opinion  as  to 
who  discovered  it.  Some  credit  its  discovery  to  Benjamin 
Franklin  and  some  to  Pelatiah  Webster ;  but  Mr.  John  Fiske 
has  pointed  out  that  the  principle  was  embodied  in  the 
ancient  federation  of  Greek  cities  known  as  the  Achaean 
League,  and  is  present  in  the  modern  federation  of  the 
cantons  which  constitute  the  republic  of  Switzerland.  He 
further  declares  that  the  principle  was  never  fairly  demon- 
strated and  never  could  be  until  it  was  applied  to  a  large 
and  populous  country  through  a  considerable  period  of 
time.  We  have  supplied  these  conditions  and  this  is  prop- 
erly speaking  our  contribution  to  the  science  of  government. 
And  beyond  question  in  its  continued  success  lies  the  best 
hope  for  the  future  peace  of  the  world. 

The  difference  between  the  two  kinds  of  government  does 
not  at  first  blush  seem  to  be  great,  but,  as  a  matter  of  fact, 
the  two  types  are  almost  as  far  apart  as  the  poles. 


254  Militant  Life  Insurance 

The  departure  involved  in  the  new  type  was  much  clearer 
to  our  forefathers  than  it  is  to  us.  Under  the  Confedera- 
tion they  had  won  independence.  They  recognized  the 
pressing  need  of  a  different  and  a  stronger  plan,  but  about 
the  old  plan  clustered  traditions  and  the  memory  of  strug- 
gles which  went  back  almost  to  Jamestown  and  to  Plymouth. 
In  order  to  create  the  beginnings  of  a  nation,  they  had  to 
exercise  a  forbearance,  a  charity  and  a  wisdom,  which  are 
a  constant  source  of  wonder  to  the  student  of  that  period. 
Once  get  yourself  into  the  atmosphere  of  those  times,  get 
even  an  approximate  idea  of  their  passion  for  local  self- 
government— the  idea  of  sovereignty  which  had  seized  on 
the  people  of  each  of  the  original  thirteen  States— under- 
stand the  variety  and  even  the  hostility  of  their  interests, 
and  then  consider  the  instrument  which  that  devoted  body 
of  men  wrought  out  in  Philadelphia  in  1787,  and  the  mar- 
velous work  it  has  since  done  in  nation  building,  and  you 
will  understand  why  Thomas  Jefferson  pronounced  it  the 
work  of  demi-gods ;  and  you  will  have  a  higher  appreciation 
too  of  the  truth  of  what  Gladstone  said  later,  namely,  that  it 
is  "the  most  wonderful  piece  of  work  ever  struck  off  at  a 
given  time  by  the  brain  and  purpose  of  man".  It  was  a 
series  of  compromises— compromises  between  the  larger  and 
the  smaller  States,  compromises  with  slavery,  compromises 
all  through— but  the  great  principle  then  adopted,  which 
has  more  and  more  asserted  itself,  which  has  developed  the 
instinct  of  nationality,  which  preserved  the  nation  through 
a  fearful  war,  which  has  developed  it  territorially  from  the 
Atlantic  to  the  Pacific  and  across  the  Pacific,  is,  that  the 
general  government  acts  for  the  general  welfare,  that  it  acts 
directly  on  the  individual  and  acts  in  whatever  way  it  is 
necessary  for  it  to  act  for  the  purpose  of  executing  its 
general  powers. 

However  keen  the  vision  of  Washington  and  Franklin 
and  Madison  and  Hamilton— the  men  who  dominated  the 


Insurance  Supervision  and  National  Ideals        255 

Constitutional  Convention — however  much  they  may  have 
seen  that  the  future  of  free  government  and  the  develop- 
ment of  human  liberty  were  wrapped  up  in  their  plan,  the 
people  of  that  time  were  impelled  by  no  such  motives.  They 
were  passionately  devoted  to  their  local  sovereignty.  To  them 
the  creation  of  a  new  style  of  government  was  largely  a  ques- 
tion of  commercial  peace  between  the  States  and  with  for- 
eign countries.  The  situation  substantially  compelled  them 
to  recognize  the  necessity  of  a  central  government  strong 
enough  to  keep  the  peace  and  regulate  commercial  inter- 
course. The  Revolution  itself  had  been  largely  brought 
about  by  commercial  considerations.  The  British  Govern- 
ment sought  to  keep  the  Colonies  in  subjection  for  purposes 
of  favorable  trade,  and  against  this  the  Colonies  rebelled. 
After  independence  had  been  won  a  situation  bordering  on 
anarchy  quickly  developed.  Foreign  countries  were  un- 
willing to  enter  into  treaties  with  the  United  States  under 
the  articles  of  Confederation.  The  Confederation  had  no 
control  over  commerce,  and  commercial  war*  in  a  variety  of 

•Only  British  built  ships,  owned  and  navigated  by  British  sub- 
jects, were  allowed  to  trade  between  New  England  and  the  British 
West  Indies.  American  ships  trading  directly  with  Great  Britain  were 
allowed  to  carry  only  articles  produced  in  the  particular  States  of 
which  their  owners  were  citizens.  Massachusetts,  New  Hampshire  and 
Rhode  Island  prohibited  British  ships  from  carrying  goods  out  of  their 
harbors  and  imposed  a  heavy  duty  on  all  goods  brought  in  by  such 
ships.  New  York  imposed  a  double  duty  on  goods  imported  in  British 
ships.  Pennsylvania  levied  duties  for  the  benefit  of  local  manufac- 
turers. Congress  was  unable  to  persuade  the  States  to  carry  out  the 
recommendations  it  had  agreed  to  in  the  treaty  of  peace  with  England 
respecting  the  treatment  of  loyalists  and  the  payment  of  private  debts 
owing  to  British  subjects.  In  retaliation  and  to  the  great  humiliation 
of  the  new  nation,  British  garrisons  were  not  withdrawn  from  Ogdens- 
burg,  Oswego,  Niagara,  Detroit  and  Mackinaw  until  eight  years  after 
the  adoption  of  the  Constitution.  The  Confederation  had  no  power  to 
lay  and  collect  taxes  or  duties,  and  it  was  unable  to  pay  the  ragged 
Continentals  who  had  won  our  independence.  The  nation  was  too  poor 
to  bribe  the  Barbary  pirates  and  too  weak  to  .chastise  them,  and 
American  ships  were  plundered  in  the  Mediterranean  and  American 
sailors — citizens  who  had  established  our  independence — were  sold  as 
slaves  in  the  markets  of  Tripoli  and  Algiers. 

Under  the  union  between  the  States  as  such,  with  no  power  in 


256  Militant  Life  Insurance 

forms  soon  developed.  This  condition  growing  out  of  the 
feebleness  of  the  Federal  Government  resulted  in  a  deep 
and  general  conviction  that  commerce  ought  to  be  regulated 
by  Congress,  and  found  expression  in  the  commerce  clause 
of  the  Constitution.  As  to  the  breadth  of  the  powers  con- 
tained in  this  clause,  Chief  Justice  Marshall  said : 

"It  is  not,  therefore,  a  matter  of  surprise  that  the  grant 
should  be  as  extensive  as  the  mischief,  and  should  compre- 
hend all  foreign  commerce  and  all  commerce  among  the 
States." 

The  departures  of  the  new  instrument  from  the  old 
were  so  radical  that  many  of  the  States  hesitated,  and  yet, 
as  we  can  see  now  and  as  they  came  to  see,  there  was  nothing 
else  for  them  to  do.  It  was  this  or  anarchy.  But  even  after 
the  States  had  all  ratified  the  Constitution,  and  the  new 
nation  had  been  launched  upon  its  career,  the  people  found 
it  difficult  to  take  their  own  medicine. 

But  steadily  the  national  ideal  gained  ground.     Slowly 

the  central  government  to  act  directly  on  the  individual  citizen,  control 
over  what  was  common  to  all  the  States  naturally  failed,  and  it  was 
followed  by  commercial  war  between  the  States  themselves.  Con- 
necticut opened  her  ports  to  British  ships  and  levied  duties  on  imports 
from  Massachusetts.  Pennsylvania  discriminated  against  Delaware 
and  New  Jersey.  New  York  required  vessels  from  Connecticut  and 
New  Jersey  to  pay  entrance  fees  and  obtain  clearances  at  the  custom 
house  the  same  as  foreign  ships.  Crippled  in  her  foreign  trade  and 
oppressed  with  debt,  Massachusetts  laid  a  heavy  tax  on  land,  and 
presently  what  is  known  as  Shay's  Rebellion  broke  out. 

The  same  chaos  existed  in  monetary  affairs.  There  was  no 
national  coinage  law  until  1785,  and  no  money  was  coined  until  1793. 
The  gold  and  silver  coins  in  use  were  English,  Spanish,  French  and 
German.  Notwithstanding  the  disastrous  experience  of  the  country 
with  the  irredeemable  paper  issued  by  authority  of  Congress  during 
the  Revolution,  seven  of  the  States  resorted  to  the  same  expedient 
and  some  of  them  attempted  to  enforce  its  use  as  legal  tender.  This 
resulted  in  litigation  and  a  general  paralysis  of  local  trade.  The 
efforts  of  Rhode  Island  to  enforce  the  use  of  paper  money  as  legal 
tender  gave  her  the  nickname  of  "Rogues'  Island". 

That  commercial  necessities  initiated  the  movement  which  re- 
sulted in  calling  the  convention  which  framed  the  Constitution  is  a 
fact  not  generally  known.  In  1785,  Washington  became  president  of  a 


Insurance  Supervision  and  National  Ideals        257 

the  general  government  extended  its  operations  from  the 
external  concerns  of  the  nation  and  from  those  internal 
concerns  which  affect  the  States  generally,  to  those  with 
which  it  was  necessary  for  it  to  interfere,  and  with  which 
it  had  the  right  to  interfere  through  its  direct  operation  on 
the  citizen,  for  the  purpose  of  executing  its  general  powers. 
Every  inch  of  the  ground,  however,  has  been  fought  over. 
And  that  contest,  involving  always  more  or  less  clearly  the 
development  of  national  powers  as  against  the  powers  of  the 
States,  has  been  a  leading  issue  between  political  parties— 
whenever  there  has  been  a  clear  issue— from  that  day  to  this. 
Naturally  the  Federalists  who  had  been  most  active  in 
advocating  the  adoption  of  the  Constitution  favored  a  lib- 
eral construction  of  it.  They  wanted  it  to  become  effective. 
Their  opponents— then  called  Republicans— favored  a  strict 
interpretation  of  it.  The  Federalists,  forced  by  the  situation 
to  take  the  initiative,  obliged  to  do  whatever  was  necessary 
through  taxation  and  otherwise  to  carry  on  the  new  govern- 

company  for  extending  the  navigation  of  the  Potomac  and  James 
Rivers.  This  could  not  be  done  unless  Virginia  and  Maryland  acted 
together.  Washington's  plans  involved  a  connection  between  the  head 
waters  of  the  Potomac  and  the  Ohio,  and  therefore  Pennsylvania  was 
invited  to  become  a  party  to  the  enterprise.  The  papers  as  finally 
sent  to  the  Legislatures  of  Maryland  and  Virginia  contained  a  sug- 
gestion made  by  Washington  himself,  that  these  two  States  should 
agree  upon  a  uniform  system  of  duties  and  other  commercial  regula- 
tions and  upon  a  uniform  currency.  Both  States  ratified  such  a  com- 
pact, and  Maryland  then  proposed  that  Delaware  also  be  consulted, 
and  that  the  plan  include  a  canal  between  the  Delaware  River  and 
Chesapeake  Bay.  Maryland  finally  suggested  that  all  the  States  be 
invited  to  send  commissioners  to  the  conference.  Nine  States  com- 
plied, and  delegates  from  five  States  met  at  Annapolis  in  September, 
1786.  New  Jersey  instructed  her  delegates  "to  consider  how  far  a 
uniform  system  in  their  commercial  relations  and  other  Important 
matters  might  be  necessary  to  the  common  interest  and  permanent 
harmony  of  the  several  States".  The  conference  noted  the  phrase 
"other  important  matters"  and  considered  it  an  improvement  on  the 
original  plan.  In  this  appears  a  recognition  of  the  necessity  of  some 
action  dealing  with  the  general  commercial  chaos  which  then  ruled. 
The  Annapolis  conference  resulted  in  no  definite  action  except  the 
adoption  of  an  address  written  by  Alexander  Hamilton,  urging  that 


258  Militant  Life  Insurance 

ment,  did  not  long  endure.  Then  came  Thomas  Jefferson, 
nominally  the  founder  of  the  party  of  strict  construction. 
The  burden  of  the  new  government,  with  its  then  more  or 
less  undefined  relations  to  the  States,  with  its  powers  un- 
developed, fell  on  men  who  were  supposed  to  be  least 
in  sympathy  with  the  national  idea.  An  emergency  which 
put  them  to  the  test  quickly  arose.  In  the  struggle  for  the 
possession  of  the  Mississippi,  Jefferson  proposed  and  Con- 
gress authorized  the  purchase  of  the  Island  of  Orleans  and 
what  was  called  West  Florida.  In  the  end  they  bought  the 
whole  ancient  province  of  Louisiana,  a  tract  of  land  richer 
and  larger  in  area  than  the  original  thirteen  States.  Al- 
though Jefferson  had  advocated  the  smaller  purchase,  and 
there  was  no  difference  in  principle  between  what  was 
originally  proposed  and  what  was  finally  done,  yet  he  be- 
lieved that  in  signing  the  treaty  of  purchase  he  had  "done 
an  act  beyond  the  Constitution".  He  could  find  in  the  Con- 
stitution no  authority  for  such  a  proceeding.  His  friends 


commissioners  be  appointed  by  all  the  States  to  meet  in  Philadelphia 
in  May  1787,  "to  devise  such  further  provisions  as  shall  appear  to  them 
necessary  to  render  the  Constitution  of  the  Federal  Government  ade- 
quate to  the  exigencies  of  the  Union,  and  to  report  to  Congress  such  an 
act  as,  when  agreed  to  by  them,  and  confirmed  by  the  Legislatures  of 
every  State,  would  effectually  provide  for  the  same."  This  address, 
born  of  a  commercial  question,  resulted  directly  in  the  Constitutional 
Convention.  At  first  the  Continental  Congress  refused  to  notice  the 
Annapolis  conference  and  the  address  which  resulted  from  it.  They 
said  the  Conference  was  an  irregular  body  without  authority.  But 
the  States,  wiser  than  the  Congress,  led  by  Virginia,  began  to  appoint 
delegates,  and  when  New  York  refused  her  assent  to  a  plan  of  Con- 
gress for  levying  and  collecting  duties  on  imports,  thereby  further 
emphasizing  the  impotency  of  Congress  itself,  a  reluctant  consent 
was  given,  and,  as  a  salve  to  the  pride  of  its  members,  Congress  itself 
issued  a  call  for  a  convention  identical  with  that  of  the  Annapolis 
conference.  This  convention  in  the  summer  of  1787,  working  behind 
closed  doors,  finally  produced  an  instrument  which  did  not  satisfy 
anyone  at  the  time,  to  which  some  of  the  States  gave  tardy  and 
reluctant  assent.  As  Webster  afterward  declared — the  Union  "had 
its  origin  in  the  necessities  of  disordered  finance,  prostrate  com- 
merce and  ruined  credit." 


Insurance  Supervision  and  National  Ideals        259 

believed  that  in  the  treaty-making  power  he  had  sufficient 
authority,  and  Chief  Justice  Marshall  in  1828  confirmed 
that  view  in  an  important  decision,  when  he  said : 

"The  Constitution  confers  absolutely  on  the  government 
of  the  Union  the  powers  of  making  war  and  making  treaties ; 
consequently  that  government  possesses  the  power  of  ac- 
quiring territory  either  by  conquest  or  treaty." 

Such  are  the  curious  ways  of  politicians  that  the  Fed- 
eralists who  before  the  purchase  had  urged  the  most  ex- 
treme measures  to  secure  navigation  of  the  Mississippi,  now 
vehemently  questioned  both  the  constitutionality  and  the 
wisdom  of  an  act  which  not  only  secured  the  Mississippi  but 
an  Empire  besides. 

The  people,  however,  with  an  instinct  which  foreshad- 
owed the  decision  of  Marshall,  approved  the  act ;  they  recog- 
nized that  it  was  clearly  in  the  line  of  national  aspirations, 
that  it  tended  to  insure  the  peace  and  the  safety  of  the 
Republic.  This  was  perhaps  the  first  great  instance  in 
which,  by  interpretation  and  by  acquiescence  on  the  part 
of  the  people,  a  way  was  found. 

Following  the  path  upon  which  Jefferson  first  entered, 
we  purchased  Florida,  we  discovered,  explored  and  settled 
the  Oregon  country,  we  annexed  Texas  on  the  petition  of 
its  people.  We  acquired  California,  Nevada,  Arizona,  New 
Mexico,  and  portions  of  Colorado  and  Oklahoma.  We  pur- 
chased Alaska.  We  annexed  Hawaii  on  the  petition  of  its 
de  facto  government.  We  took  the  Philippines,  Porto  Rico 
and  Guam.  In  five  of  these  eight  cases,  additions  to  our 
territorial  domain  were  made  and  the  highest  function  of 
sovereignty  was  exercised,  when  the  Federal  government 
was  under  the  control  of  the  party  popularly  known  as  the 
party  of  strict  construction. 

Twelve  amendments  were  made  to  the  Constitution  dur- 
ing the  first  fifteen  years  of  its  existence.  During  the  next 


260  Militant  Life  Insurance 

sixty-two  years  none  were  made.  In  this  era  the  Consti- 
tution was  being  interpreted.  The  Executive  and  the  Courts 
were  slowly  finding  out  the  powers  granted  either  specifi- 
cally or  by  implication,  and  they  found  all  that  was 
necessary  to  carry  on  the  national  government.  The  growth 
of  Federal  power  during  that  time  was  very  great,  and  in 
that  period  the  citizens  of  the  States  transferred  to  their 
national  citizenship  a  large  part  of  the  love  and  reverence 
which  they  had  formerly  bestowed  upon  their  State  citizen- 
ship. The  conviction  constantly  increased  that  under  the 
Union  and  the  Constitution,  there  was,  upon  the  whole, 
better  freedom  and  greater  happiness  than  could  possibly 
be  secured  in  any  other  way.  The  purchase  of  Louisiana 
and  the  second  war  with  Great  Britain  led  the  administra- 
tion irresistibly  along  the  path  of  a  liberal  interpretation  of 
the  Constitution.  They  may  not  have  altogether  liked  it.  There 
was  nothing  else  for  them  to  do.  The  embargo  which  they 
had  denounced  in  1793,  they  employed  in  1807.  The  United 
States  Bank,  which  they  had  denounced  in  1791  and  refused 
to  recharter  in  1811,  was  rechartered  by  an  almost  unani- 
mous vote  in  1816.  They  followed  so  closely  the  lines  laid 
down  by  the  Federalists  that  Josiah  Quincy  declared  the 
Republicans  had  out-Federalized  Federalism.  But  the  tri- 
umphs of  both  parties  were  the  triumphs  of  national  ideals. 
This  is  probably  much  clearer  to  us  than  it  was  to  them. 
The  father  of  strict  construction  took  the  first  step  in  the 
policy  of  expansion  which  has  secured  us  our  pre-eminence 
on  the  North  American  continent,  and  the  last  of  his  great 
contemporaries,  by  an  equally  wise  and  daring  exercise 
of  executive  power,  put  an  end  to  foreign  aggressions  upon 
this  continent.  The  Monroe  doctrine  has  no  other  standing 
in  the  Constitution  than  this :  that  the  Constitution  made  the 
United  States  a  sovereign  nation  with  certain  ideals  which 
are  to  be  pursued,  and  with  which  further  foreign  aggres- 
sions in  this  hemisphere  would  interfere.  It  is  curious  that 


Insurance  Supervision  and  National  Ideals        261 

this  doctrine  also  found  its  strongest  supporters  amongst 
the  strict  constructionists,  and  in  our  own  day  a  President 
who  would  not  annex  Hawaii  upon  the  petition  of  its  de 
facto  government  put  more  stiffening  into  the  backbone  of 
the  Monroe  Doctrine  than  it  had  received  since  Secretary 
Seward  politely  requested  Napoleon  III  to  get  out  of 
Mexico. 

With  the  expansion  of  the  national  domain  to  the  Pacific 
came  the  necessity  of  easier  access  to  that  Coast  and  of  a 
naval  station  in  Caribbean  waters.  The  story  of  negotia- 
tions forwarding  these  purposes  is  a  long  one,  and  includes 
many  failures,  but  the  idea  has  never  been  abandoned,  and 
now  the  United  States  owns  Porto  Rico  and  is  making  the 
"dirt  fly"  in  digging  a  canal  connecting  the  Atlantic  and 
the  Pacific,  a  great  waterway  which,  when  completed,  will 
be  entirely  under  the  control  of  the  United  States. 

The  supreme  event  in  the  development  of  national  ideals 
came  to  an  issue  in  1860.  African  slavery  existed  in  every 
State  of  the  Union  but  one  when  the  Constitution  was 
adopted,  and  its  status  under  the  new  government  was  one 
of  the  compromises  of  the  Constitution.  The  words  slave 
and  slavery  were  carefully  avoided  in  wording  that  instru- 
ment, and  it  was  then  the  general  opinion  that  the  institu- 
tion would  gradually  die  out.  The  ordinance  of  1787,  one 
of  the  last  enactments  of  the  old  Confederation,  assented 
to  by  all  the  States,  had  consecrated  the  Northwest  territory 
to  freedom,  but  the  Louisiana  Purchase  contained  no  such 
provision  and  over  the  settlement  and  government  of  that 
vast  region  was  ultimately  waged  a  conflict  which  tested 
the  vitality  and  established  the  power  of  the  nation.  Dur- 
ing the  years  which  preceded  this  conflict,  the  anti-slavery 
party  pursued  its  ideal  of  limiting  slavery  within  a  certain 
area,  while  the  pro-slavery  party  persistently  followed  its 
purpose  of  protecting  slavery  in  the  unorganized  territory 
of  the  country  and  in  the  erection  of  new  slave  States 


262  Militant  Life  Insurance 

whenever  the  people  so  desired.    Both  parties  claimed  the 
sanction  of  the  Constitution. 

We  sometimes  lose  sight  of  the  great  issue  of  that  fearful 
struggle.  We  have  just  celebrated  the  centenary  of  the 
hirth  of  Abraham  Lincoln,  whose  election  to  the  Presidency 
precipitated  the  conflict.  We  have  heard  much  of  Lincoln, 
the  "Emancipator",  and  we  have  been  told  that  the  Civil 
War  was  fought  in  order  to  abolish  slavery.  Lincoln  knew 
better  than  this.  He  realized  that  the  great  thing  to  be 
done  was  to  preserve  the  Union  and  the  principles  of  gov- 
ernment and  of  nationality  which  it  embodied.  You  re- 
member, in  his  first  inaugural  address,  he  said  to  those 
whom  he  called  his  "dissatisfied  fellow-countrymen ": 

"You  can  have  no  oath  registered  in  Heaven  to  destroy 
the  government,  while  I  shall  have  the  most  solemn  one  to 
'preserve,  protect  and  defend'  it.  The  mystic  chords  of 
memory,  stretching  from  every  battle-field  and  patriot  grave 
to  every  living  heart  and  hearthstone  all  over  this  broad 
land,  will  yet  swell  the  chorus  of  the  Union,  when  again 
touched,  as  surely  they  will  be,  by  the  better  angels  of  our 
nature." 

He  stated  the  issue  as  between  the  Union  and  slavery 
in  1862,  when  Horace  Greeley  published  in  the  Tribune  an 
open  letter  urging  a  more  decided  policy  on  the  part  of  the 
government  with  respect  to  slavery.  Lincoln  replied,  in  that 
immortal  declaration  with  which  you  are  all  familiar : 

"If  there  be  those  who  would  not  save  the  Union  unless 
they  could  at  the  same  time  save  slavery,  I  do  not  agree  with 
them.  If  there  be  those  who  would  not  save  the  Union 
unless  they  could  at  the  same  time  destroy  slavery,  I 
do  not  agree  with  them.  My  paramount  object  is  to  save 
the  Union,  and  not  either  to  save  or  destroy  slavery.  If  I 
could  save  the  Union,  without  freeing  any  slave,  I  would  do 
it;  if  I  could  save  it  by  freeing  all  the  slaves,  I  would  do  it; 
and  if  I  could  do  it  by  freeing  some,  and  leaving  others 
alone,  I  would  also  do  that.  What  I  do  about  slavery  and  the 


Insurance  Supervision  and  National  Ideals        263 

colored  race,  I  do  because  I  believe  it  helps  to  save  this 
Union.  And  what  I  forbear,  I  forbear  because  I  do  not  be- 
lieve it  would  help  to  save  the  Union.  I  shall  do  less  when- 
ever I  shall  believe  that  what  I  am  doing  hurts  the  cause, 
and  I  shall  do  more  whenever  I  believe  doing  more  will  help 
the  cause." 

Lincoln's  supreme  purpose  and  the  issue  of  the  war  was 
the  preservation  of  the  Union.  When  he  thought  that  such 
action  would  help  to  save  the  Union,  he  issued  the  Emanci- 
pation Proclamation.  But  it  was  a  war  measure,  distinctly 
unauthorized  by  the  Constitution  up  to  the  time  of  the 
adoption  of  the  Thirteenth  Amendment. 

Another  long  struggle  which  resulted  in  a  great  advance 
in  national  ideals  was  in  the  field  of  finance.  When  the 
Constitution  was  adopted  the  nation  as  such  had  no  revenue, 
no  credit.  But  Alexander  Hamilton,  the  first  and  greatest 
Secretary  of  the  Treasury,  putting  into  effect  the  powers 
granted  by  the  Constitution,  soon  wrought  what  seemed  a 
miraculous  change.  As  Webster  said :  *  *  He  smote  the  rock 
of  the  national  resources,  and  abundant  streams  of  revenue 
gushed  forth.  He  touched  the  corpse  of  public  credit,  and 
it  sprung  upon  its  feet.  * '  One  of  the  means  employed  was 
a  United  States  Bank,  chartered  by  Congress.  The  strict 
constructionists  contended  that  the  government  had  no  au- 
thority to  charter  a  bank.  Its  right  to  do  so  was  upheld 
by  the  Supreme  Court  on  the  ground  that  it  was  a  suitable 
agency  in  borrowing  money  which  the  government  had  an 
undoubted  right  to  do.  The  contest  was  a  long  and  bitter 
one  and  the  strict  constructionists  refused  to  recharter  the 
bank  in  1811,  but  were  glad  to  do  so  in  1816  when  the  cur- 
rency had  been  demoralized  by  the  second  war  with  Great 
Britain.  Prosperity  brought  some  abuses  and  all  the  old 
rancor,  and  the  bank  was  discontinued  in  1836,  and  a  new 
era  of  wild-cat  money  followed  in  certain  sections  which 
lasted  until  the  Civil  War.  Again  the  banks  suspended 


264  Militant  Life  Insurance 

specie  payments  and  the  Federal  Government  issued  legal 
tender  notes,  established  the  national  banking  system 
and  finally  taxed  State  bank  issues  10%.  The  first  and 
last  of  these  acts  were  opposed  as  unconstitutional,  but  they 
were  upheld  by  the  Supreme  Court.*  Thus  what  is  pe- 
culiarily  a  prerogative  of  sovereignty  was  transferred  from 
the  States  to  the  national  government  through  a  process  of 
interpretation,  in  response  to  national  needs  and  through 
interference  which  was  necessary  in  order  to  carry  out  the 
general  powers  of  the  government. 

Let  us  consider  a  little  more  closely  the  logic  by  which 
this  great  transformation  was  accomplished.  We  may  find 
some  comfort  therein.  Fifty  years  ago,  if  anyone  had  said 
that  within  ten  years  we  should  have  only  national  currency 
and  none  issued  by  State  banks,  he  would  have  been  laughed 
at.  Where  would  Congress  find  authority  to  take  this  pre- 
rogative away  from  the  States  ?  Let  us  follow  the  Supreme 
Court's  logic. 

The  Constitution  gives  Congress  power  ''to  borrow 
money  on  the  credit  of  the  United  States  and  to  coin 
money,  regulate  the  value  thereof,  and  of  foreign  coin". 
The  Constitution  as  a  whole  makes  the  United  States  a  sov- 
ereign nation.  Now  notice  the  links  in  the  chain  of  reason- 
ing. Congress  has  power  to  borrow  money;  therefore  it 
may  charter  a  bank  as  an  aid  in  borrowing  money.  A  bank 
so  chartered  may  be  taxed  by  the  States  only  in  such  a  man- 
ner as  Congress  permits.  Congress  may  borrow  money,  and 
the  United  States  is  a  sovereign  nation;  therefore  it  may 
emit  bills  of  credit  and  make  them  legal  tender.  Congress 
has  power  to  borrow  money;  therefore  it  may  enact  a  na- 
tional banking  law  authorizing  banks  thereunder  to  issue 
circulating  notes  based  on  the  security  of  United  States 


*McCulloch  v.  Maryland,  4  Wheaton,  316;  Legal  Tender  Cases,  12 
Wallace,  457;  110  U.  S.,  447;  National  Bank  v.  United  States,  101 
U.  S.,  1. 


Insurance  Supervision  and  National  Ideals        265 

bonds  deposited  with  the  government.  Congress  may  bor- 
row money ;  having  under  this  power  undertaken  to  supply 
the  country  with  a  stable  currency,  it  may  prevent  the  circu- 
lation as  money  of  any  notes  not  issued  under  its  authority 
~by  taxing  all  other  issues  out  of  existence. 

This  was  going  a  long  way;  it  was  clearly  one  of  the 
occasions  when  Congress  found  it  necessary  to  "interfere", 
for  the  purpose  of  executing  its  general  powers. 

A  striking  example  of  the  exercise  of  sovereignty  which 
is  not  contemplated  in  the  Constitution  is  seen  in  the  con- 
trol and  disposition  of  what  is  known  as  the  public  domain. 
To  Maryland  belongs  the  credit  of  taking  a  step  which  was 
of  far-reaching  importance  in  arousing  a  national  sentiment. 
When  the  Articles  of  Confederation  were  proposed,  Mary- 
land refused  to  adopt  them  unless  certain  other  States  would 
cede  their  unorganized  Western  lands  to  the  United  States. 
This  was  done,  and  these  lands  became  the  first  strong  bond 
of  union.  Settlers  on  these  lands  and  those  afterward  ac- 
quired took  title  from  the  general  government,  and  there 
are  few  pages  in  our  history  which,  upon  the  whole,  record 
sounder  and  more  constructive  statesmanship  than  those 
which  relate  to  this  subject.  Under  whatever  law  the  settler 
took  his  title,  the  fact  was  that  the  general  government  was 
using,  and  wisely  using,  the  national  domain  to  develop  a 
national  ideal.  It  all  followed  logically  from  the  act  of 
Maryland,  from  the  Louisiana  Purchase,  and  from  the  con- 
struction put  upon  the  Constitution  by  Chief  Justice 
Marshall. 

But  these  public  lands  have  also  been  used  to  foster 
education.  It  is  estimated  that  over  one  hundred  million 
acres  of  the  public  domain  have  been  given  to  the  different 
States  for  educational  purposes.  Where  in  the  Constitution 
is  specific  authority  given  to  Congress  to  give  away  public 
lands  to  men  who  settle  on  them  and  improve  them,  or  to 


266  Militant  Life  Insurance 

States  for  educational  purposes?  The  word  education  does 
not  occur  in  the  Constitution.  Congress  has  power  to  make 
all  needful  rules  and  regulations  respecting  the  territory  or 
other  property  belonging  to  the  United  States,  and  from 
these  few  words  has  been  deduced  the  authority  to  govern 
territory  belonging  to  the  United  States  as  well  as  absolute 
control  of  her  lands  whether  within  State  or  territorial 
limits.  Clearly  these  provisions  for  education  were  made 
with  slight  reference  to  explicit  constitutional  authority. 
The  action  was  taken  because,  under  our  form  of  govern- 
ment, homes  and  education  are  amongst  the  most  cherished 
national  ideals;  because  it  seemed  necessary  that  the  gov- 
ernment interfere,  in  the  execution  of  its  general  duties 
and  powers. 

The  States  ceded  to  Congress  under  the  new  Constitution 
the  power  to  regulate  commerce  with  foreign  nations  and 
among  the  several  States  and  with  the  Indian  tribes,  but 
here  again  they  found  it  difficult  to  take  their  own  medicine. 
It  was  not  easy  to  give  up  this  prerogative  of  sovereignty. 
Almost  immediately  the  question  arose,  What  is  commerce  ? 
It  was  soon  decided  that  commerce  was  something  more 
than  traffic  or  trade,— it  included  transportation,  trans- 
portation of  passengers  as  well  as  of  goods.  When  steam 
came  into  use  as  a  motive  power,  that  became  an  issue ;  but 
it  was  decided  that  commerce  included  all  the  means  as  well 
as  the  subjects  of  transportation.  When  the  electric  tele- 
graph came  into  use,  it  was  decided  that  this  was  a  medium 
of  commercial  intercourse.  When  the  telephone  came  into 
use,  the  same  reasoning  made  its  use  between  States  inter- 
state commerce.  At  first  Congress  was  considered  as  having 
jurisdiction  only  over  waters  affected  by  the  tide,  but  this 
authority  was  soon  extended  to  all  navigable  waters  upon 
which  interstate  commerce  is  carried  on,  and  to  bridges  over 
navigable  waters  separating  two  States.  At  the  present 


Insurance  Supervision  and  National  Ideals        267 

time  the  authority  of  Congress  extends  to  the  places,  the 
means  and  the  subjects  of  trade  and  commerce.* 

Since  the  passage  of  the  Interstate  Commerce  Act  of 
1887,  there  has  been  a  remarkable  increase  in  the  activity 
of  the  Federal  Government  with  respect  to  control  over 
interstate  commerce.  President  Eliot  of  Harvard  Univer- 
sity not  long  ago  stated  that  our  entire  domain  between  the 
Atlantic  and  the  Pacific,  between  Mexico  and  Canada,  was 
really  not  as  large  as  New  England  was  sixty  years  ago,  and, 
as  a  problem  in  commerce  and  transportation,  nothing  like 
as  large  as  the  original  thirteen  States.  We  have  moved 
on  into  what  is  almost  a  new  world.  We  are  facing  new 
problems.  We  are  facing  the  further  development  of 
national  ideals.  We  cling  as  tenaciously  as  our  forefathers 
did  to  what  we  call  the  right  of  local  self-government. 
What  we  are  now  and  then  asked  to  give  up  seems  to  us 
much  more  vital  than  what  they  were  asked  to  surrender 
in  the  general  interest.  We  can  see  how  necessary  it  was 
for  them  to  do  it.  It  is  not  so  easy  for  us  to  understand 
the  force  and  direction  of  the  conditions  which  we  face. 
We  have  the  most  extended  system  of  railroad  transporta- 
tion in  the  world.  The  use  of  the  telegraph  and  the  tele- 
phone has  extended  throughout  the  nation.  Many  impor- 
tant types  of  business  are  organized  on  continental  lines. 
The  question,  then,  is:  When  we  insist  on  what  we  call 
local  self-government  as  against  the  obvious  significance 
of  such  facts  as  these,  are  we  not  as  shortsighted  as  our  fore- 
fathers would  have  been  if  they  had  carried  their  oppo- 
sition to  the  Constitution  further  than  they  did  1  The  fact 
is,  we  are  still  entirely  devoted  to  local  self-government. 
But  what  is  local  self-government?  When  a  business  nat- 


*Gibbons  v.  Ogden,  9  Wheaton,  1;  Gloucester  Ferry  Co.  v.  Penn- 
sylvania, 114  U.  S.,  196;  Moran  v.  City  of  New  Orleans,  112  U.  S.,  69; 
Passenger  Cases,  7  Howard,  283;  Walling  v.  Michigan,  116  U.  S.,  446; 
Tel.  Co.  v.  Texas,  U.  S.,  460;  Pa.  Tel.  Co.,  48  N.  J.,  Eq.  91,  20,  Atl.  846, 
27  Am.  St.  Rep.,  462. 


268  Militant  Life  Insurance 

urally  extends  over  all  the  States  of  the  United  States,  is  it 
local  self-government  to  attempt  to  regulate  it  in  forty-six 
different  places  by  forty-six  separate  sovereign  authorities? 
Under  these  conditions  isn  't  the  local  idea  plainly  encroach- 
ing on  the  national  prerogative  1 

On  all  these  large  questions  the  government  has  not 
acted  until  it  was  obliged  to.  There  has  been  no  aggression 
as  against  the  States.  Looking  back  at  these  contests— in 
which  the  issue  was  frequently  doubtful— we  see  that  no 
other  solution  was  possible,  that  there  was  nothing  else  for 
the  government  to  do,  nothing  else  for  the  Supreme  Court 
to  do.  When  Livingston  and  Monroe  purchased  Louisiana, 
there  was  nothing  for  Jefferson  and  Congress  to  do  but  just 
what  they  did.  When  the  question  of  a  national  currency 
became  critical,  there  was  nothing  for  Congress  to  do  but 
what  it  did,  or  something  similar,  and  there  was  nothing  for 
the  Supreme  Court  to  do  but  to  sustain  it.  When  the  ques- 
tion of  railroads  arose,  it  was  already  a  large  question  be- 
fore it  became  a  Federal  question;  it  involved  interests  so 
extensive  that  the  country  generally  appreciated  its  im- 
portance and  understood  that  half-way  measures  would 
not  do. 

Unfortunately  for  us,  the  Supreme  Court  declared  in- 
surance to  be  neither  commerce  nor  an  instrumentality  of 
commerce  in  the  case  of  Paul  vs.  Virginia  (1868),  long  be- 
fore many  people  had  any  adequate  notion  of  what  insur- 
ance was  to  do  and  to  be.  It  is  useless  now  to  conjecture 
what  the  makers  of  the  Constitution  would  have  done  if 
insurance  had  at  that  time  been  the  large  subject  it  is 
to-day.  It  is  useless  to  conjecture,  too,  what  the  Supreme 
Court  might  have  done  in  the  case  of  Paul  vs.  Virginia,  if 
Congress  had  previously  legislated  upon  the  assumption 
that  interstate  insurance  was  interstate  commerce. 

The  chaotic  condition  which  existed  in  the  commerce 
between  the  States  was,  as  we  have  seen,  one  of  the  things 


Insurance  Supervision  and  National  Ideals        269 

that  drove  the  States  toward  a  ' '  more  perfect  union ' '.    That 
condition,  in  a  more  or  less  aggravated  form,  has  existed 
in  insurance  for  eighty  years.  In  1829,  Pennsylvania  levied 
a  tax  of  20%  on  the  premiums  of  other-state  companies. 
This  was  done  under  the  familiar  plea  of  protecting  the 
business  of  domestic  corporations.    There  was  a  similar  tax 
of  10%  in  New  York  from  1828  to  1837.     In  1851,  New 
York,  by  means  of  a  deposit  law  drove  all  other-state  com- 
panies but  two  beyond  its  borders,  and  when  the  other 
States  retaliated,  the  New  York  State  companies  withdrew 
from  them.    In  1874,  California  by  radical  legislation  drove 
twenty-nine  companies  out  of  her  jurisdiction.     Recently 
nearly  all  the  life  companies  withdrew  from  Texas  and 
Wisconsin  because  of  oppressive  legislation,  and  eight  with- 
drew from  New  York  State  for  the  same  reason.    A  Missouri 
law  allows  no  company  to  do  business  within  her  borders 
which  pays  salaries  above  a  certain  limit.*     Many  of  the 
States  refuse  admission  to  companies  of  other  States  unless 
they  in  advance  agree  to  surrender  the  protection  of  the 
Federal  Courts,  and  to  that  extent  their  rights  under  the 
Constitution  of  the  United  States.    Most  of  the  States  have 
on  their  statute  books,  in  their  insurance  laws,  that  relic  of 
1  barbarism,  the  lex  talionis,  the  law  which  exacts  an  eye  for 
an  eye,  a  tooth  for  a  tooth.    The  condition  is  becoming  pro- 
gressively worse.     It  is  akin  to  those  which  existed  one 
hundred  and  twenty  years  ago  with  respect  to  commerce.    It 
is  not  unlike  those  which  then  existed  regarding  foreign 
intercourse,  public  credit,  currency,  and  that  comity  be- 
tween States  which  makes  for  union  and  peace.    The  prob- 
lems of  commerce,  of  expansion  of  public  credit,  of  cur- 
rency were  solved  by  the  action  of  the  general  government 
either  through  its  specific  or  its  implied  powers.    There  is 
apparently  no  other  method  by  which  the  problem  of  insur- 
ance supervision  can  be  solved. 

*This  law  was  repealed  by  Legislature  of  Missouri,  in  1911. 


270  Militant  Life  Insurance 

The  Supreme  Court  has  said  that  insurance  is  not  com- 
merce. It  has  further  said  that  a  State  may  exact  from  a 
foreign  corporation  seeking  admission  to  its  borders,  com- 
pliance with  any  condition  it  sees  fit  to  impose.*  These  two 
pronouncements  face  insurance  on  the  one  side,  and  the 
chaos  resulting  from  trying  to  obey  forty-six  different 
masters  at  the  same  time  confronts  it  on  the  other. 

Toward  these  decisions  of  the  Supreme  Court  we  main- 
tain the  attitude  that  Lincoln  assumed  toward  the  Dred 
Scott  decision.  He  said : 

"It  is  not  resistance,  it  is  not  factious,  it  is  not  even  dis- 
respectful, to  treat  it  as  not  having  yet  quite  established  a 
settled  doctrine  for  the  country.  *  *  *  The  Court  that 
made  it  has  often  overruled  its  own  decisions,  and  we  shall 
do  what  we  can  to  have  it  overrule  this.  We  offer  no  re- 
sistance to  it." 

While  the  Supreme  Court  has  several  times  flatly  said 
that  insurance  is  not  commerce,  I  think  it  by  no  means  im- 
possible that  later  on  it  may  take  a  different  view.  I  am  not 
sure  that  it  has  not  already  done  so.  The  relations  of  things 
have  changed.  And  wise  courts  interpret  constitutions  in 
the  light  of  changed  conditions  and  in  the  interest  of  all  the 
people. 

Insurance  is  business.  It  includes  the  purchase  and  sale 
of  contract  rights  which  have  become  an  almost  indispen- 
sable factor  in  business,  in  credit  and  in  traffic.  It  is  a 
business  that  from  its  very  nature  is  most  secure  when 
widely  distributed,  and  it  naturally  and  inevitably  has 
become  an  interstate  business.  It  is  a  business  which  from 
its  character  requires  a  reasonable  measure  of  governmental 
supervision,  and  at  the  present  time  it  is  more  extensively 
supervised  by  governments  than  any  other  class  of  business. 
There  is,  perhaps,  no  business  in  which  efficiency  and  econo- 


•Nutting  v.  Massachusetts,  183  U.  S.,  553,  556,  46  L.  Ed.  324,  325, 
22  Sup.  Ct.  Rep.,  238,  239. 


Insurance  Supervision  and  National  Ideals        271 

my  are  so  much  promoted  by  uniformity  of  legal  require- 
ments everywhere;  no  business  that  is  more  easily  em- 
barrassed, harassed,  and  rendered  inefficient  and  unprofit- 
able by  conflicting  laws  and  conditions. 

But  the  Supreme  Court  has  said  that  it  is  not  commerce. 
The  transportation  of  goods  and  passengers  is  commerce, 
and  all  the  means  used  as  instrumentalities  thereof  are 
commerce.  The  sale  of  goods  by  sample  by  drummers  is 
commerce,  but  the  sale  of  life  insurance  policies  by  agents 
is  not  commerce.  A  telegraphic  message  relating  to  a  life 
insurance  policy— or  any  other  kind  of  business— is  com- 
merce, but  the  policy  itself,  sent  by  mail  or  otherwise,  is  not 
commerce.  If  a  company  talks  to  an  insurant  in  a  neigh- 
boring State  over  the  telephone,  the  talk  is  commerce,  but 
the  subject  of  the  talk  is  not. 


I  have  now  briefly  reviewed  some  of  the  instances  in  the 
history  of  the  country  which  have  resulted  in  the  develop- 
ment of  national  ideals  and  the  expansion  of  national  power. 
My  purpose  has  been  to  show  that  Congress,  under  the 
Constitution  and  under  the  wise  rulings  of  the  Supreme 
Court,  has  always  had  power  sufficient  to  meet  any  emer- 
gency, and  that  such  emergencies  have  always  been  met  in 
the  interest  of  the  whole  people.  I  might  rest  here  and 
have,  I  think,  a  very  good  case.  Having  pointed  out  the 
inevitable  chaos  and  confusion  which  have  followed  the 
attempt  entirely  to  supervise  the  business  of  insurance  by 
forty-six  different  authorities,  having  shown  the  hopeless- 
ness of  any  attempt  to  secure  efficient  administration 
through  harmony  of  action  amongst  the  States,  it  is  a  fair 
deduction  to  say  that  a  business  involving  such  large  inter- 
ests, capable  of  such  great  usefulness,  a  business  so  neces- 
sarily interstate  in  its  nature,  is  entitled  somehow,  some  way, 
to  just  supervision  and  wise  control.  And  as  that  cannot  be 


272  Militant  Life  Insurance 

had  under  the  present  system,  relief  from  the  General  Gov- 
ernment must  in  time  come  by  force  of  circumstances  and 
through  the  logic  which  has  so  nobly  served  the  people  from 
the  time  of  John  Marshall  to  the  present  day. 

The  force  of  such  conditions  has  already  asserted  itself, 
and  unless  I  misread  the  mind  of  the  Supreme  Court  in  a 
leading  case,  relief  from  an  illogical  and  reactionary  con- 
dition is  already  in  sight. 

In  1902,  the  Supreme  Court  of  the  United  States,  in  its 
interpretation  of  the  powers  of  Congress  under  the  com- 
merce clause  of  the  Constitution,  went  farther  than  ever  it 
had  gone  before.  The  case  before  the  Court  was  that  of 
Champion  vs.  Ames,  and  will  be  familiar  to  you  as  the 
"Lottery  Case'*.*  By  this  decision  the  validity  of  an  act  of 
Congress  for  the  suppression  of  lottery  traffic  through  in- 
ternational and  interstate  commerce  and  the  postal  service 
was  sustained.  As  I  read  the  entire  case,  the  previous  dec- 
larations of  the  Court  that  insurance  is  not  commerce  are 
therein  substantially  overruled;  and,  under  the  doctrine 
laid  down,  it  seems  reasonably  clear  that  if  Congress  should 
now  pass  an  act  providing  for  Federal  supervision  and 
regulation  of  interstate  insurance,  the  Supreme  Court 
would  be  bound  to  sustain  it. 

Counsel  for  the  lottery  company  urged  that  a  contract 
of  lottery  was  substantially  the  same  as  a  contract  of  insur- 
ance, and  that  the  principle  in  the  two  could  not  be  dis- 
tinguished. The  minority  of  the  Court,  for  whom  Chief 
Justice  Fuller  delivered  the  dissenting  opinion,  urged  the 
same  doctrine,  and  pointed  out  that  the  Court  had  already 
decided  that  insurance  contracts  are  not  articles  of  com- 
merce ;  that  they  are  not  subjects  of  trade  and  barter  offered 
in  the  market  as  something  having  an  existence  and  value 
independent  of  the  parties  to  them ;  that  they  are  not  com- 


•Champion  v.  Ames,  188  U.  S.,  492. 


Insurance  Supervision  and  National  Ideals        273 

modities  to  be  shipped  from  one  State  to  another  and  then 
put  up  for  sale.  The  logic  of  which  was  that  the  sale  of 
lottery  tickets  being  indistinguishable  in  principle  from  the 
sale  of  insurance  policies  must  necessarily  fall  outside  the 
commerce  clause  and  outside  the  power  of  Congress  to  regu- 
late. In  effect,  therefore,  the  relation  of  insurance  to  the 
commerce  clause  of  the  Constitution  was  before  the  Court 
and  was  fully  discussed.  Not  only  was  it  discussed  in  the 
briefs  of  the  appellant,  but  it  was  apparently  a  part  of  the 
oral  argument;  and  the  case  of  Paul  vs.  Virginia  was  the 
leading  case  upon  which  the  minority  of  the  Court  based 
their  dissent. 

In  delivering  the  majority  opinion  of  the  Court  in  the 
lottery  case,  Mr.  Justice  Harlan,  singularly  enough,  made  no 
reference  to  the  insurance  cases.  Insurance,  as  such,  was 
not  before  the  Court,  and  there  was,  therefore,  no  controlling 
reason  why  the  Court,  if  it  believed  that  the  doctrine  laid 
down  in  Paul  vs.  Virginia  was  an  error,  should  so  state.  If, 
however,  a  majority  of  the  Court  believed  that  the  sale  of 
lottery  tickets  could  be  distinguished  in  principle  from  the 
sale  of  insurance  policies,  it  is  fair  to  assume  that  they 
would  have  said  so.  This  would  have  been  the  natural  thing 
to  do.  The  argument  of  the  lottery  people  was :  Lottery  is 
like  insurance,  therefore,  it  is  not  commerce.  The  Court 
decided  without  refuting  the  argument  on  that  point,  that 
the  interstate  sale  and  carriage  of  lottery  tickets  is  com- 
merce. In  reaching  this  decision,  the  Court  sought  first 
for  a  definition  of  the  word  "  commerce "  as  used  in  the 
Constitution,  and,  amongst  other  things,  said: 

"Undoubtedly  the  carrying  from  one  State  to  another  by 
independent  carriers  of  things  or  commodities  that  are  ordi- 
narily subjects  of  traffic  and  which  have  in  themselves  a 
recognized  value  in  money  constitutes  interstate  commerce. 
But  does  not  commerce  among  the  several  States  include 
something  more?  Does  not  the  carrying  from  one  State  to 


274  Militant  Life  Insurance 

another  by  independent  carriers  of  lottery  tickets  that  entitle 
the  holder  to  the  payment  of  a  certain  amount  of  money 
therein  specified  also  constitute  commerce  amongst  the 
States?" 

After  various  citations,  seeking  rather  to  arrive  at  a 
definition  of  what  commerce  is,  the  Court  said : 

"They  (the  cases  cited)  show  that  commerce  among  the 
States  embraces  navigation,  intercourse,  communication, 
traffic,  the  transit  of  persons  and  the  transmission  of  mes- 
sages by  telegraph."  (He  would  now  add  transmission  of 
messages  by  telephone.)  "They  also  show  that  the  power  to 
regulate  commerce  among  the  several  States  is  vested  in 
Congress  as  absolutely  as  it  would  be  in  a  single  government 
having  in  its  Constitution  the  same  restrictions  of  the  exer- 
cise of  the  power  as  are  found  in  the  Constitution  of  the 
United  States." 

Then  without  specific  reference  to  that  case,  the  Court 
met  the  doctrine  laid  down  in  Paul  vs.  Virginia  in  this 
language : 

"It  was  said  in  argument  that  lottery  tickets  are  not  of 
any  real  or  substantial  value  in  themselves,  and  therefore 
are  not  subjects  of  commerce.  If  that  were  conceded  to  be 
the  only  legal  test  as  to  what  are  to  be  deemed  subjects  of 
commerce  that  may  be  regulated  by  Congress,  we  cannot 
accept  as  accurate  the  broad  statement  that  such  tickets  are 
of  no  value." 

This  language  is  very  significant.  In  logical  effect  it 
overrules  the  doctrine  laid  down  in  Paul  vs.  Virginia.  It 
intimates  that  an  interstate  transaction  may  be  commerce 
even  if  the  article  transported  has  no  value  in  itself.  But, 
finding  some  actual  value  in  a  lottery  ticket,  the  Court 
brushed  all  other  considerations  aside  and  said:  "Lottery 
tickets  are  subjects  of  traffic,  and  therefore  subjects  of 
commerce. ' ' 

Every  element  of  value  which  the  Court  found  in  lottery 


Insurance  Supervision  and  National  Ideals        275 

tickets  exists  also  in  insurance  policies.  The  Court  found 
that  lottery  tickets  had  value  because  of  a  large  capital 
prize  to  be  paid  to  the  holder  of  the  winning  ticket,  because 
of  large  deposits  of  money  in  different  banks  in  the  United 
States  insuring  the  prompt  payment  of  prizes.  Lottery 
tickets  were  subjects  of  traffic  because  they  could  be  sold, 
and  they  had  a  value  even  in  States  which  made  the 
drawing  of  lotteries  illegal.  The  parallel  between  such  con- 
ditions and  those  which  attach  to  insurance  is  almost  perfect. 

Whether  the  Court  recognized  at  the  time  that  the  doc- 
trine in  Champion  vs.  Ames  overrules  the  doctrine  in  Paul 
vs.  Virginia,  must  be  a  matter  of  opinion  until  a  direct 
test  is  made  under  similar  conditions ;  but  it  is  evident  from 
the  text  of  the  two  opinions  then  rendered  that  there  was  a 
vigorous  interchange  of  ideas  between  the  various  members 
of  the  Court  before  the  opinions  were  arrived  at. 

"Could  Congress",  asked  the  Chief  Justice,  "compel  a 
State  to  admit  lottery  matter  within  it  contrary  to  its  own 
laws?"  And  the  answer  of  the  majority  opinion  clearly 
would  be,  "Yes,  Congress  could".  It  would  simply  be  un- 
wise legislation,  and  by  way  of  rebuttal  the  majority 
opinion  adds : 

"The  possible  abuse  of  the  power  is  not  an  argument 
against  its  existence.  There  is  probably  no  governmental 
power  that  may  not  be  exerted  to  the  injury  of  the  public. 
The  remedy  is  that  suggested  by  Chief  Justice  Marshall  when 
he  said:  'The  wisdom  and  the  discretion  of  Congress,  their 
anxiety  for  the  people  and  the  influence  which  their  constitu- 
ents possess  at  elections,  are  in  this,  as  in  many  other  in- 
stances, the  sole  restraints  on  which  they  have  to  rely  to 
secure  them  from  abuse.' " 

Apparently  anticipating  that  some  one  might  miscon- 
strue the  effect  of  the  lottery  decision,  the  Court  said : 

"We  decide  nothing  more  in  the  present  case  than  that 
lottery  tickets  are  subjects  of  traffic  among  those  who  choose 


276  Militant  Life  Insurance 

to  sell  or  buy  them;  the  carriage  of  such  tickets  by  inde- 
pendent carriers  from  one  State  to  another  is,  therefore, 
interstate  commerce." 

Insurance,  with  a  hesitancy  which  is  not  readily  under- 
stood, has  never  made  any  serious  attempt  to  secure  action 
by  Congress.  The  insurance  cases  went  before  the  Court 
supported  by  no  declaration  from  Congress  that  the  business 
is  commerce,— a  situation  which  itself  invited  an  adverse 
conclusion.  Whenever  the  question  has  been  raised  since 
then,  immediately  Paul  vs.  Virginia  and  the  other  cases 
in  which  opinion  has  followed  the  doctrine  of  that  case 
have  been  cited,  and  the  matter  has  been  dropped  as  hope- 
less. But  the  lottery  case  has  vastly  changed  the  whole  situa- 
tion. These  insurance  cases  may  now  be  treated  as  Lincoln 
treated  the  Dred  Scott  decision.  They  "have  not  quite 
established  a  settled  doctrine  for  the  country ' '.  The  lottery 
case  affords  abundant  warrant  for  a  request  that  Congress 
now  act.  A  law  should  be  drawn  on  the  theory  that  inter- 
state insurance  is  commerce,  and  that  the  power  of  Congress 
to  regulate  insurance  in  its  interstate  relations  is  absolute. 
Presented  with  such  an  act,  the  Supreme  Court,  with  the 
deference  which  it  has  always  observed  toward  Congress, 
would  we  believe  be  disposed  to  accept  the  declaration  by 
Congress  that  interstate  insurance  is  commerce  and  is  subject 
to  control  by  Congress.  If  a  case  were  to  arise  under  such 
an  act,  it  is  difficult  to  see  how  the  Court  could  render  any 
different  decision  from  that  in  the  lottery  case.  In  the 
lottery  case  the  Court  was  properly  seeking  to  put  an  end 
to  a  great  public  evil,  to  abate  a  great  public  scandal.  It 
was  obvious  that  the  evil  would  not  and  could  not  be  ended 
by  the  States,  and  therefore  the  power  to  deal  with  the  situa- 
tion which  must  lie  somewhere,  was  recognized  as  being  in 
Congress  under  the  commerce  clause. 

Insurance  would  present  a  case  in  which  the  law  and  the 
Court  would  be  invoked,  not  to  abate  or  destroy  an  evil,  but 


Insurance  Supervision  and  National  Ideals        277 

to  conserve  and  protect  a  great  public  utility.  It  probably 
would  not  go  before  the  Court  with  the  pressure  of  a  wide- 
spread public  demand  behind  it.  It  would  go  before  the 
Court  stating,  first,  that  it  is  commerce ;  second,  that  it  is  in 
distress  and  confusion  and  needs  the  relief  which  a  single 
authority  alone  can  give ;  third,  that  it  is  irrationally  super- 
vised ;  fourth,  that  it  is  harassed  by  a  multitude  of  exactions 
and  requirements;  fifth,  that  it  is  unequally  and  unjustly 
taxed;  sixth,  that  its  operations  are,  in  practice,  almost 
universally  interstate  and  often  international ;  and  seventh, 
that  the  governmental  regulations  which  it  now  observes 
have  begun  to  narrow  its  field  of  activities,  a  condition 
which,  carried  to  its  logical  conclusion,  threatens  ulti- 
mately to  limit  the  operations  of  every  insurance  company 
to  the  State  of  its  domicile. 

There  must  be  relief  somewhere.  The  problem  will  not 
be  solved  by  the  States.  It  cannot  be.  The  solution  lies  in 
the  commerce  clause  of  the  Constitution,  and  an  act  of  Con- 
gress, drawn  on  the  theory  I  have  suggested,  would  bring 
insurance  before  the  Court  in  a  proper  way.  It  would  be 
able  to  present  its  just  claims,  and  they  could  be  argued 
from  the  standpoint  of  a  powerful  precedent.  So  presented, 
the  question  would  at  least  be  settled  and  insurance  would 
know  finally  whether  it  may  go  forward  or  not.  I  do  not 
believe,  therefore,  that  an  amendment  to  the  Constitution 
of  the  United  States  is  necessary.  I  believe  that  insurance  is 
commerce.  I  believe  the  Supreme  Court,  which  has,  as  I  see 
it,  already  said  so  by  implication,  will  ultimately  say  so  by 
definite  decree. 

State  supervision  of  insurance  is  not  as  logical  as  the 
union  of  the  Colonies  under  the  Confederation.  The  Colonies 
had  in  their  Congress  at  least  one  point  of  contact.  There 
is  no  point  of  contact  in  State  supervision,  no  common 
authority. 


278  Militant  Life  Insurance 

There  was  chaos  under  the  Confederation;  there  are 
chaotic  conditions  now  under  State  supervision.  The  Colo- 
nies needed  a  larger,  a  stronger,  a  broader  plan.  They 
found  that  plan  in  the  Constitution.  Society  itself  presents 
much  of  the  savage  individualism  that  would  certainly  have 
destroyed  the  Colonies  under  the  Confederation.  The  rule 
of  the  strong  is  the  law  of  society.  Waste,  inefficiency,  bru- 
tality, selfishness,  the  lack  of  any  comprehensive  plan,  make 
even  the  best  of  civilizations  more  or  less  inhumane.  So- 
ciety would  like  to  be  humane,  but  it  has  little  time  and  no 
sufficient  program.  Society  has  advanced  only  to  that  con- 
dition of  efficiency  which  was  exemplified  in  the  Confed- 
eration. It  needs  a  Constitution  which  shall  provide  a  more 
perfect  Union.  Insurance— fire  insurance  as  an  instrumen- 
tality of  credit  and  traffic,  and  life  insurance  as  a  sure  and 
just  method  of  capitalizing  human  life— presents  a  plan, 
and,  so  far  as  it  goes,  an  adequate  plan.  But,  like  the  Con- 
stitution, it  operates,  if  it  operates  effectively,  directly  on 
the  citizen  and  not  on  the  several  States.  In  other  words, 
the  plan  of  insurance— especially  of  life  insurance— is  the 
plan  of  the  Constitution. 

Through  Federal  supervision  we  seek  the  adoption  of  this 
social  constitution.  When  that  is  done,  the  chaos  of  the 
Confederation,  of  State  supervision,  will  disappear  as  cer- 
tainly as  it  did  in  1789.  Otherwise  the  outlook  is  not  hope- 
ful. Reaction  has  begun.  There  is  no  escape  ultimately 
from  one  of  two  conditions :  either  Federal  supervision,  with 
an  increase  in  the  usefulness  and  the  strength  of  insurance, 
which  always  follows  a  change  from  confused  to  sound 
methods;  or,  retreat.  Retreat  means  immeasurable  loss;  it 
means  ultimate  retirement  for  every  company  to  the  confines 
of  the  State  of  its  domicile. 

Will  insurance  act  ?  Will  Congress  act  1  Will  Congress 
and  the  Supreme  Court,  through  the  commerce  clause  of  the 
Constitution,  or  through  some  of  the  government's  implied 


Insurance  Supervision  and  National  Ideals        279 

powers,  open  the  door  to  that  larger  field  which  the  business 
alone  is  qualified  to  occupy? 

The  door  is  there.    It  has  swung  open  many  times. 

It  opened  and  through  it  passed  that  stately  procession 
of  commonwealths  which  has  added  thirty-three  stars  to  the 
flag. 

It  opened  and  through  it  passed  the  Monroe  Doctrine. 

It  opened  and  through  it  came  the  Emancipation  Procla- 
mation. 

It  opened  and  through  it  came  a  national  currency. 

It  will  open  again— indeed,  it  seems  almost  ajar  now — 
and  through  it  in  some  form  will  come  Federal  supervision 
of  interstate  insurance. 


LIFE  INSURANCE  AND  THE 
MORAL  OBLIGATION  OF  EMPLOYERS 


Aw  ADDRKBB  DELIVERED  AT  THE  TENTH  ANNUAL  DINNEB  OF  THE  NATIONAL 

Crvio  FEDERATION,  HOTEL  ASTOB,  NEW  YORK, 

NOVEMBER  23,  1909 


HE  growth  of  life  insurance  and  the  de- 
velopment of  a  deep  sense  of  responsi- 
bility on  the  part  of  employers  of  labor 
toward  their  employees  are  contempo- 
raneous and  kindred  phenomena.  They 
represent  a  better  knowledge  of  the  value 
of  human  life  and  a  recognition  of  the 
increasing  demand  now  fairly  made  on 
the  controlling  forces  of  society,  by  age 
and  industrial  misfortune,  as  well  as  by  infancy,  congenital 
incapacity,  and  weakness. 

The  middle-aged  and  the  socially  inefficient  now  form 
a  relatively  larger  section  of  society  than  ever  before. 
There  are  two  reasons  for  this.  The  first  is,  that  while 
there  may  not  be  as  many  children  born  now  as  formerly, 
amongst  certain  people,  of  the  number  born  a  much  larger 
portion  reach  maturity.  In  other  words  the  ratio  of 
adults  to  a  given  number  of  births  has  increased.  The 

280 


The  Moral  Obligation  of  Employers  281 

second  reason  is  that  modern  business  methods  and  the 
modern  corporation,  especially  the  manufacturing  corpo- 
ration, have  created  new  conditions  and  complications. 
They  have  added  to  those  who  join  the  dependent  classes 
under  a  simpler  life,  those  who  become  dependent  because 
their  active  lives  have  been  devoted  to  highly  specialized 
work. 

Highly  specialized  labor  is  constantly  menaced  by  loss 
of  occupation,  and  this  menace  increases  as  the  age  of  the 
worker  advances.  Under  the  fierce  competition  which 
governs  the  greater  portion  of  our  industrial  life,  new 
processes,  new  methods,  short  cuts,  labor-saving  devices, 
new  inventions,  are  all  eagerly  sought  by  the  employer  of 
labor.  Some  of  these  are  revolutionary  in  their  effects. 
They  call  for  a  readjustment  of  the  whole  plant.  When 
that  readjustment  comes,  the  older  men  are  invariably 
dropped.  In  short,  the  avenues  which  lead  to  employ- 
ment, for  all  highly  specialized  labor,  are  practically  open 
now  only  to  youth.  The  middle-aged  man  enters  with 
difficulty,  and  the  man  past  middle  life  substantially  can- 
not enter  at  all.  The  man  who  did  many  things,  none  of 
them  highly  specialized,  from  twenty  to  sixty-five,  is 
likely  never  to  become  entirely  dependent  upon  society. 
The  man  who  did  some  highly  specialized  piece  of  work 
which  involved  only  a  part  of  some  specific  thing,  or  even 
a  part  of  a  part,  may  be  forced  into  the  dependent  class 
before  he  reaches  old  age,  and  when  he  joins  that  class 
he  is  much  more  helpless  than  the  man  who  has  done 
many  things.  It  is  probable  that  the  specialist,  although 
he  labored  fewer  years,  rendered  society  the  more  valu- 
able service  of  the  two,  and  that  therefore  he  has,  morally 
at  least,  a  clearer  title  to  consideration.  But  however 
that  may  be,  he  is  the  inevitable  product  of  the  whole 
plan  of  society  and  business,  and  the  obligation  of  the 
man  who  employs  him,  and  the  interest  of  general  society 


282  Militant  Life  Insurance 

in  what  finally  becomes  of  him,  are  clear  and  unavoidable. 
That  this  class  must  be  shown  how  to  protect  itself 
against  the  menace  which  it  constantly  faces  or  that  it 
must  be  helped  outright  after  disaster  or  age  come,  are 
compelling  facts  in  the  sociology  of  the  times. 

There  can  be  no  question  that  a  system  which  teaches 
these  people  how  to  protect  themselves  against  this 
menace,  is  more  in  harmony  with  the  genius  of  our  insti- 
tutions than  a  system  which  coerces  them  into  action  or  a 
system  which  finally  places  the  burden  of  their  support 
and  care  upon  general  society.  It  does  not  follow  that  a 
system  which  works  well  in  Germany  would  work  well 
here ;  or  that  a  system  which  appeals  to  the  needs  of  the 
people  of  Great  Britain  will  answer  here.  There  are  dis- 
tinct advantages  in  the  German  plan, — chiefly  that  it  is 
compulsory  and  that  the  laborer  is  forced  to  make  pro- 
vision for  certain  benefits  even  though  he  may  have  no 
very  intelligent  understanding  of  the  wisdom  of  the  plan 
or  its  effects  on  society.  There  is  a  difference  between  the 
compulsion  of  government,  which  tells  the  workingman 
that  certain  things  must  be  done,  and  the  proposition  of  a 
corporation  which  tells  a  man  what  the  conditions  of  his 
hiring  are.  If  the  conditions  named  by  the  employer 
involve  some  system  of  life  insurance,  some  system  of 
deferred  annuities,  a  man  can  study  the  question  and  take 
a  position  or  leave  it  alone  because  it  recommends  itself 
to  his  judgment  or  otherwise.  This  is  a  slower  process 
than  the  German  method,  and  probably  for  a  good  many 
years  will  be  more  expensive ;  but  it  seems  to  me  to  be  in 
harmony  with  our  notions  of  individual  responsibility  and 
the  rights  as  well  as  the  obligations  of  American  citizen- 
ship. 

The  efficient  employee,  in  specialized  labor,  has  a  fair 
claim  to  something  beyond  the  returns  contained  in  the 
ordinary  contract  of  hiring.  This  right  may  be  strength- 


The  Moral  Obligation  of  Employers  283 

ened  and  its  realization  advanced,  but  it  cannot  directly 
be  met,  in  this  country,  by  governmental  action.  The 
capable  worker  deserves  and  should  demand  a  program 
of  hiring  under  which  he  shall  be  entitled — and  entitled 
by  contract,  not  by  the  grace  of  his  employer — to  certain 
protection  for  his  family  if  he  dies  prematurely,  and  to 
certain  protection  for  himself  if  in  the  vicissitudes  of 
industrial  war  he  is  shelved  and  wholly  or  in  part  com- 
pelled to  join  the  dependent  class. 

There  are  sound  reasons  why  corporations  should  avail 
themselves  in  this  work  of  the  highly  developed  system  of 
insurance  and  annuities  presented  by  the  responsible  in- 
surance institutions  of  this  and  of  other  States.  Any 
effective  system  if  established  by  corporations  indepen- 
dently, will  be  based  on  the  principles  and  methods  used 
by  the  insurance  companies,  and  therefore  the  work  for 
obvious  reasons  is  in  the  end  likely  to  be  more  effectively 
and  more  economically  done  by  men  who  are  experts  and 
specialists  than  by  men  who  undertake  it  with  no  special 
training  and  with  minds  chiefly  occupied  by  the  demands 
of  other  lines  of  work. 

I  shall  therefore  assume  that  life  insurance,  and  prob- 
ably other  types  of  insurance,  including  accident  and 
sickness  insurance,  as  represented  by  existing  corpora- 
tions, is  not  only  well  equipped  to  help  in  the  solution  of 
this  problem,  but  is  a  part  of  the  evolution  of  the  times 
which  has  produced  the  problem  itself,  and  is  another 
illustration  of  the  curious  fact  that  in  the  processes  of 
evolution  a  solution  of  a  problem  often  appears  at  the 
same  time  the  problem  itself  is  evolved.  For  example, 
what  might  have  happened  in  the  enormous  industrial 
activity  of  the  United  States  and  its  necessary  output  of 
securities  seeking  purchasers,  if  millions  of  people,  com- 
bining their  small  savings  in  the  reserves  of  the  great  life 
insurance  companies,  had  not  appeared  upon  the  scene 


284  Militant  Life  Insurance 

contemporaneously  seeking  securities  in  which  to  invest 
their  money  ?  The  function  of  life  insurance  and  of  other 
types  of  insurance  on  the  one  hand,  and  the  obligation  of 
the  employer  of  labor  to  his  employees  on  the  other,  bear, 
it  seems  to  me,  an  identical  relation. 

Life  insurance  is  already  effectively  at  work.  While 
the  employer  of  labor  has  only  in  the  most  limited  way 
used  the  idea  or  appreciated  its  beneficence,  progress  has 
been  made  toward  the  solution  of  this  problem.  Elimi- 
nating industrial  companies  and  including  only  those  com- 
panies whose  business  is  supposed  to  be  confined  to  people 
of  means,  we  find  the  average  policy  the  country  over  is 
a  little  under  $2,000.  In  other  words,  the  mass  of  so- 
called  regular  insurance  is  held  by  people  of  small  means. 
If  now  we  add  to  these  the  millions  who  carry  what  is 
called  " industrial' '  insurance,  and  the  other  millions 
who  have  so-called  " fraternal' '  insurance,  we  have  cov- 
ered substantially  the  whole  insurance  field.  We  com- 
prehend an  interest  whose  accumulations  surpass  those 
of  any  other  single  line  of  human  endeavor,  except  the 
accumulations  of  savings  banks,  and  yet  we  have  not 
gone  outside  of  what  may  properly  be  called  the  labor- 
ing class.  The  energy  of  life  insurance  management,  in 
other  words,  and  the  obligation  which  the  laboring  man 
feels  toward  his  family,  have  in  their  development  far 
outrun  the  sense  of  obligation  of  the  employer.  We  have 
now  reached  the  point  when  the  employer  is  beginning  to 
do  his  part,— but  as  yet  he  has  only  made  a  beginning. 
That  he  will  do  more  is  certain;  that  he  will  do  much  is 
almost  equally  certain.  That  existing  insurance  institu- 
tions will  be  utilized  is,  I  believe,  a  necessity.  But  if  this 
is  to  be  done,  there  are  certain  interfering  conditions  which 
must  be  dealt  with  before  any  such  plan — however  desir- 
able, complete  and  beneficent — can  be  carried  into  effect. 

First,    insurance— and    other    business    too— must    be 


The  Moral  Obligation  of  Employers  285 

relieved  of  the  annoyances  and  burdens  which  attach  to 
compliance  with  the  behests  of  forty-six  sovereign  masters 
— forty-seven  now,  since  the  general  government  has  de- 
cided to  create  a  Federal  Insurance  Bureau  for  purposes 
of  taxation  only.  When  the  Supreme  Court  declared  that 
insurance  was  not  even  an  instrumentality  of  commerce, 
I  am  constrained  to  believe  that  distinguished  and  hon- 
ored body  lacked  information  as  to  the  part  which  fire 
insurance  and  life  insurance  even  then  played  in  the  com- 
merce of  the  country. 

In  a  decision  made  a  generation  later  the  Court,  on  a 
question  which  involved  the  same  principle,  and  brought 
insurance  in  indirectly,  apparently  overruled  its  earlier 
decree.  But  that  brings  no  relief. 

Let  me  illustrate  the  absurdity  of  the  present  con- 
dition : 

An  applicant  for  life  insurance  lives  in  New  Jersey 
and  I  have  a  policy  on  his  life  ready  for  delivery  on  my 
desk.  If  I  telegraph  him  about  the  policy,  the  message  is 
interstate  commerce.  If  I  telephone  him  about  the  policy, 
that  is  interstate  commerce.  But  if  I  send  the  policy  itself 
to  him  by  hand  or  through  the  mails  or  by  express,  that  is 
not  interstate  commerce. 

Of  course  such  doctrine  has  encouraged  radical  action 
by  the  various  States  of  the  Union.  And  the  business  is 
now  harassed  by  regulations  and  restrictions  and  limita- 
tions which  destroy  efficiency  and  involve  heavy  expense. 
A  large  number  of  States  have  successfully  nullified  the 
Constitution  of  the  United  States  by  compelling  compa- 
nies of  other  States  to  agree,  as  a  condition  of  the  con- 
tinuance of  their  franchises,  that  cases  against  the  com- 
pany arising  in  that  State  shall  not  be  taken  to  any  Fed- 
eral Court.  And  yet  though  life  insurance  is  thus  denied 
the  protection  theoretically  provided  for  all,  in  the  Fed- 
eral Constitution,  the  Federal  Government  now  materially 


286  Militant  Life  Insurance 

adds  to  the  enormous  burdens  of  taxation  which  policy- 
holders  pay  the  several  States  by  an  added  tax — giving 
the  companies  no  franchise,  no  added  protection,  nothing 
in  return. 

Ex-President  Eliot,  speaking  here  two  years  ago,  said 
that  the  entire  United  States  was  really  not  as  large  then 
as  New  England  was  sixty  years  before.  And,  while  that 
is  true,  and  while  it  presents  an  opportunity  for  indus- 
trial and  commercial  development  such  perhaps  as  never 
existed  before  in  any  country,  business  is  faced  by  the 
reactionary  effect  of  having  within  our  own  country  to 
deal  with  forty-six  different  frontiers,  and  is  being  para- 
lyzed by  the  fact  that  the  individual  States  are  attempt- 
ing to  supervise  affairs  that  comprehend  and  relate  to  all 
the  States.  In  other  words,  under  the  plea  that  States' 
rights  must  be  preserved,  the  States  are  invading  the 
national  domain  and  are  enormously  retarding  national 
development. 

Before  life  insurance  and  its  process  of  capitalizing 
the  strength  of  to-day  as  against  the  weakness  of  to- 
morrow can  be  broadly  utilized,  interstate  insurance  must 
be  declared  by  Congress  to  be  what  it  manifestly  is— not 
only  an  instrumentality  of  commerce,  but  interstate 
commerce. 

Again,  before  existing  insurance  institutions  can  be 
effectively  used,  legislation  by  the  various  States  affecting 
companies  domiciled  in  such  States  must  be  the  product 
of  something  besides  hysterics.  I  have  frequently  com- 
mended much  of  the  so-called  Armstrong  code  of  insur- 
ance laws,  but  there  are  some  sections  in  that  code  so 
bad  that  they  would  be  a  blot  on  the  statute  book  of  a  semi- 
civilized  republic.  Wisconsin  has  bad  laws;  so  has  Mis- 
souri. Texas  has  asserted  her  sovereignty  to  such  an  ex- 
tent that  substantially  every  responsible  life  insurance 
institution  has  been  driven  beyond  her  borders. 


The  Moral  Obligation  of  Employers  287 

To  be  a  little  more  specific.  Our  legislators  passed 
the  Armstrong  laws  hurriedly.  They  had  little  time 
for  consideration  of  a  problem  which  was  intricate  and 
vexatious ;  which  involved  billions  of  value  and  the  direct 
interests  of  millions  of  people.  Radical  legislation  usu- 
ally involves  constitutional  questions.  One  of  the  great 
functions  of  Courts  is  to  protect  the  people  against  vio- 
lent legislation ;  one  of  the  great  duties  of  Courts  is  to  see 
that  the  fundamental  law  of  the  land  is  not  violated  by 
legislators.  Apparently  recognizing  the  fact  that  some 
of  these  statutes  might  be  in  violation  of  the  fundamental 
law  of  the  land,  the  framers  added  a  blanket  amendment 
which  declared  that  any  violation  of  any  provision  of 
these  statutes  should  of  itself  be  a  misdemeanor.  Any 
mere  business  transaction  which,  in  its  nature  is  no  more 
criminal  than  eating  dinner,  if  done  for  any  reason  out- 
side the  specific  rules  laid  down,  is  declared  to  be  a  crime. 
Consequently,  however  destructive  or  unjust  any  section 
of  the  law  may  be;  however  cunningly  special  interests 
may  have  entrenched  themselves  behind  the  phrasing  of 
the  statute ;  however  economically  unwise  and  unfair  any 
provision  may  be,  there  is  substantially  no  remedy.  With- 
out first  committing  a  crime,  the  question  of  constitution- 
ality can  be  raised  only  with  extreme  difficulty.  Access  to 
the  courts  is  as  effectually  barred  here  as  access  to  the 
Federal  Courts  is  barred  by  the  statutes  of  some  of  the 
States. 

Another  section  on  the  face  of  it  assumes  to  limit  by 
calendar  years  the  legitimate  activities  of  the  insurance 
companies  of  this  State, — but  not  those  of  other  States 
here  or  elsewhere.*  The  statute  is  one  of  peculiar  interest, 
not  only  to  the  Civic  Federation  because  of  its  increasing 
study  of  industrial  insurance,  but  to  every  citizen  who 


*Since  modified  and  made  to  apply  to  all  companies  doing  busi- 
ness in  the  State. 


288  Militant  Life  Insurance 

represents  any  business  interest  and  is  jealous  of  his 
right  to  a  fair  and  free  exercise  of  all  his  capacities. 
The  statute  introduces  what  is  perhaps  the  most  radical 
principle  ever  written  into  the  laws  of  this  State.  Having 
in  other  sections  fixed  the  cost  at  which  life  insurance 
may  be  acquired,  having  provided  for  the  most  scrupulous 
and  detailed  supervision  by  the  State,  having  exacted  the 
fullest  publicity,  the  code  in  this  section  undertakes  arbi- 
trarily, in  addition,  to  limit  the  activities  of  companies 
by  calendar  years.  But  this  section  is  not  altogether  what 
it  is  generally  understood  to  be.  Let  me  make  that  clear 
by  a  hypothetical  illustration:  Suppose  there  should  be  a 
general  discussion  before  the  people  of  the  State  of  the 
propriety  of  legislation  involving  this  principle  as  applied 
to  various  kinds  of  business.  Suppose  after  discussion  the 
Legislature  should  announce  that  it  intended  to  enact  a 
statute  which  would  limit  the  amount  of  deposits  which 
the  banks  of  the  City  of  New  York  might  receive  in  any 
one  year,  fixing  the  limit  at  about  one-half  the  sum  which 
a  number  of  banks  were  then  receiving.  Suppose  the  Leg- 
islature should  announce  that  it  intended  to  pass  another 
law  limiting  the  number  of  papers  which  the  great  dailies 
of  the  City  of  New  York  might  issue  in  any  day,  fixing  the 
limit  at  about  one-half  the  number  several  papers  were 
then  issuing.  You  would  probably  denounce  both  pro- 
posals as  violent,  repugnant  to  American  ideas.  But 
suppose  again  that  the  Legislature  went  ahead  and  passed 
the  laws;  and  suppose  when  you  came  afterward  calmly 
to  analyze  the  laws  you  found  that  while  they  had  theo- 
retically enacted  the  limitations  which  they  had  proposed, 
the  language  of  the  statutes  was  such  that  the  limitations 
proposed  applied  to  every  bank  except  the  National  City 
Bank,  and  to  every  paper  except  the  "New  York  World"  ! 
What  would  you  think  of  such  legislation  ?  Section  96  of 
the  insurance  laws  of  this  State  is  exactly  that  kind  of 


The  Moral  Obligation  of  Employers  289 

legislation.  It  creates  a  practical  monopoly  of  industrial 
insurance  amongst  the  companies  of  the  State.  It  extends 
other  favors  to  a  single  company,  not  specifying  the  com- 
pany by  name  but  reciting  conditions  and  a  fixed  date 
which  at  that  time  could  apply  to  no  other  company, 
which  now  can  apply  to  no  other  company,  and  which  at 
no  future  time  can  apply  to  any  other  company.  It  is  a 
piece  of  special  legislation  so  unmistakable  in  its  purpose 
and  in  its  effects  that  the  motives  of  the  men  who  proposed 
and  arranged  for  it  must  always — justly  or  otherwise — be 
the  subject  of  the  cruelest  suspicion.  That  such  a  law  could 
be  put  upon  the  statute  books  of  the  Empire  State  and  that 
it  could  remain  there  for  a  period  of  three  years  are  omi- 
nous facts.  That  it  can  remain  there  much  longer  is  incon- 
ceivable* 

The  possibilities  of  social  betterment  which  lie  in  a 
wise  joinder  of  the  function  of  insurance  in  its  various 
activities  on  the  one  hand,  and  the  moral  obligation  of 
the  employer  of  labor  on  the  other,  are  substantially  un- 
limited, and  as  yet  have  been  barely  tested.  But  before 
any  such  joinder  can  be  made  in  any  effective  way,  inter- 
state insurance  must  be  placed  under  Federal  control,  and 
some  so-called  reform  insurance  laws  in  this,  and  in  other 
States,  must  be  revised  and  rewritten  by  fair-minded  men. 


*The  law  has  since  been  amended  so  as  to  apply  Impartially  to 
all  companies. 


LIFE  INSURANCE 
AND  OUR  DUAL  CITIZENSHIP 


AN  ADDBESS  BEFOBE  THE  WEBTEBN  MASSACHUSETTS  LIFE  UNDEKWBITEBS  ASSOCIATION 
AND  THE  SPBINGFIELD  BOABD  OF  TBADE,  SPBINGFIELD,  MASS.,  MABCH  29,  1910 


;HE  position  of  life  insurance  as  a  social 
19     force  is  such  that  a  candid  discussion 
of  the  problems  which  confront  life  in- 
surance  management   is   welcomed   now 
by  responsible  citizens  everywhere. 

Discussion  is   welcomed  because   the 
average  citizen,  even  though  he  has  no 
direct  investment  in  any  life  company, 
understands  what  a  constructive  and  con- 
servative force  life  insurance  has  come  to  be. 

Every  one  knows  that  the  almost  fabulous  wealth  of  the 
United  States  has  largely  been  produced  by  systematic 
borrowing.  Bailroads  have  been  built  into  almost  unin- 
habited regions,  to  be  followed  by  the  creation  of  great 
commonwealths,— chiefly  through  the  use  of  credit.  Cities 
have  been  equipped  with  all  modern  appliances,  rivers 
have  been  tunneled,  arid  regions  changed  into  landscapes 
of  production  and  beauty, — by  the  same  means. 

The  Western  hemisphere  is  now  being  severed  at  the 


Life  Insurance  and  Our  Dual  Citizenship        291 

belt  in  order  to  make  real  the  dreams  of  Columbus  and 
Hudson— to  reach  the  East  Indies  by  sailing  westward. 
This  involves  such  a  use  of  credit  that  few  nations  could 
have  undertaken  it  without  some  financial  strain. 

As  a  nation  we  are  discussing  the  development  of  our 
inland  water-ways  and  this  will  involve  another  large  use 
of  credit. 

New  York  State  unaided  is  spending  over  $100,000,000 
on  the  Erie  Canal  and  its  branches,  and  $50,000,000  on 
good  roads.  All  this  is  possible  only  by  the  existence  and 
use  of  credit.  Credit  applied  to  the  needs  of  such  states- 
manship—because all  these  projects  are  matters  of  states- 
manship—invariably takes  on  the  form  of  bond  issues. 

When  a  bond  is  offered  for  sale,  however  excellent 
the  credit  of  the  maker,  it  cannot  be  sold  unless  there  is  a 
purchaser  and  the  purchaser  must  have  cash.  In  other 
words,  if  our  vast  system  of  expenditures  were  not  sup- 
plemented by  equally  vast  systems  of  saving  and  accu- 
mulating and  investing  money,  credit  would  fail  and  pro- 
gress would  falter,  if  not  at  times  entirely  halt. 

But  we  have  such  systems.  The  wealth  already  created 
through  our  systems  of  national  and  state  and  indus- 
trial development  is  so  vast  as  to  overtop  the  accumula- 
tions of  any  other  people,  and  the  figures  which  express 
or  estimate  its  bulk  are  so  large  as  substantially  to  lose 
meaning.  Over  against  this  is  the  corresponding  and 
necessary  evidence  of  debt;  and  over  against  both— the 
wealth  and  the  debt— stand  our  unmatched  systems  of 
saving,  accumulating  and  investing  money. 

I  am  within  the  facts  when  I  say  that  life  insurance 
is  the  largest,  the  most  aggressive,  the  most  effective  idea 
at  work  along  these  lines  in  modern  society.  The  accu- 
mulations of  savings  banks  are  a  little  larger  than  the 
accumulations  of  life  insurance;  but  they  are  not  so 
effective. 


292  Militant  Life  Insurance 

1st,  because  they  cannot  be  used  so  broadly  under  the 
law, 

2d,  because  they  lack  that  peculiar  social  power  with 
which  life  insurance  funds  are  impressed — the 
power  to  prevent  social  and  economic  catastrophe, 
the  power  measurably  to  make  good,  and  make 
good  in  money,  the  premature  loss  of  that  invalu- 
able but  severally  unstable  asset  called  human 
life,  the  power  to  halt  the  collateral  disasters 
which  usually  follow  man's  mortality. 

But  it  is  not  my  purpose  now  to  speak  .of  that  side  of 
life  insurance,  the  side  which  gives  it  moral  force  and  an 
all-sufficient  justification.  I  wish  rather  to  speak  of  the 
governmental  and  supervisory  problems  which  face  life 
insurance,  and  the  conditions  which  menace  its  growth. 

The  great  rivers  of  our  country,  seeking  their  neces- 
sary outlets,  obey  the  very  law  which  underlies  the 
proper  and  effective  development  of  life  insurance,  when 
they  follow  their  natural  channels,  disregarding  State 
lines,  meandering  through  territories  of  so-called  sover- 
eign States.  For  each  separate,  so-called  sovereign  State 
to  attempt  to  tax,  to  regulate,  to  control  all  traffic  on  any 
navigable  river  which  crosses  its  territory,  would  be  no 
more  unsound  and  no  more  destructive,  no  more  unjust 
and  no  more  selfish,  than  the  present  taxation,  control 
and  regulation  of  life  insurance  by  forty-six  separate  and 
semi-hostile  authorities. 

As  a  result  of  the  methods  by  which  it  is  now  regulated 
and  controlled,  life  insurance  finds  itself  in  the  very  fore- 
front of  those  interests  which  are  demanding  a  wider  use 
of  Federal  authority,  a  broader  interpretation  of  the  enu- 
merated powers  of  Congress,  a  further  application  of  the 
substantially  unlimited  powers  of  the  Federal  Supreme 
Court. 


Life  Insurance  and  Our  Dual  Citizenship        293 

In  order  to  state  the  problem  clearly  and  foreshadow 
a  possible  solution,  it  will  be  necessary  to  state  and  dis- 
cuss some  fundamental  facts  and  some  historical  events. 

In  the  summer  of  1787,  in  about  ninety-five  working 
days,  our  fathers  produced  that  charter  of  Free  Govern- 
ment which  we  call  the  Constitution  of  the  United  States. 
In  that  instrument  they  undertook  the  solution  of  this 
problem:  "How  may  a  central  government  be  created 
which  shall  possess  all  the  attributes  of  sovereignty  and 
yet  leave  local  sovereignty  in  the  hands  of  the  States  over 
which  the  central  government  presides?" 

They  put  forth  a  framework  of  government  that  so 
answered  the  needs  and  prejudices  of  the  time  that  it 
could  be  adopted,  and  yet  was  so  elastic  that  it  has  stood 
the  test  of  conditions  then  undreamed  of,  will  stand  other 
tests  now  being  applied  and  the  test  of  other  conditions 
yet  to  arise.  So  far  as  was  humanly  possible,  they  solved 
the  problem;  but  each  generation  since  that  day  has  had 
to  solve  the  problem  over  again.  Any  generation  which 
followed  them  could  have  rendered  the  solution  of  these 
problems  futile.  We  can  do  the  same  thing  now;  but  we 
are  not  likely  to. 

Our  problem  is  to  apply  the  same  instrument  to  the 
peculiar  conditions  of  our  times,  and,  notwithstanding 
the  greater  complexity  of  our  life,  the  vaster  interests 
involved,  and  the  greater  forces  at  work,  the  accumulated 
experience  and  wisdom  of  a  hundred  and  twenty  years 
ought  to  make  our  task  relatively  simple. 

Is  there  a  single  all-controlling  idea  or  principle  in  the 
structure  of  our  Constitution  ?  If  so,  what  is  it  ?  There  is 
such  an  idea  or  principle.  It  is  this :  A  dual  citizenship, 
under  which  we  are  at  once  citizens  of  States  and  citizens 
of  a  Nation  whose  sovereignty  is  drawn  directly  from  the 
people  of  many  States. 

Theoretically  the  spheres  of  action  of  the  Nation  and 


294  Militant  Life  Insurance 

of  the  States  are  well-defined;  practically  they  are  not. 
Between  them  there  has  always  been,  there  will  always 
be  a  zone  of  debatable  questions.  So  to  define  these 
spheres  of  action  by  statute,  by  custom,  by  constitutional 
edict,  written  or  unwritten,  as  to  husband,  encourage  and 
develop  the  energy  and  the  business  genius  of  all  the 
people,  and  at  the  same  time  preserve  individual  liberty, 
local  rule  and  true  democracy,  was  the  problem  then  and 
is  the  problem  now. 

This  problem  has  been  vital  from  the  beginning  of 
our  national  life  because  national  development  has  at 
times  shifted  these  spheres  of  action  almost  violently.  We 
say  that  our  government  is  Federal  in  form,  but  all  men 
haven't  the  same  conception  of  what  the  word  " Federal " 
means.  For  example,  the  "New  York  Times "  recently 
referred  to  the  Federal  Government  as  "the  creature  of 
the  States".  It  would  be  difficult  to  imagine  a  more  com- 
plete misconception  of  fundamental  fact,  or  a  statement 
more  pregnant  with  evil  possibilities.  Our  national  gov- 
ernment is  not  and  never  was  "the  creature  of  the 
States ".  It  was  not  and  is  not  the  creation  of  the  States. 
It  was  and  is  the  creation  of  the  people,  and  its  sover- 
eignty comes  direct  from  them, — a  principle  which  has 
been  stated  and  restated  in  decisions  of  the  Federal  Su- 
preme Court. 

Through  our  National  citizenship,  all  Federal  authority 
is  derived  from  us  and  not  from  the  States,  and  the  central 
government  acts  directly  on  us,  and  not  on  the  States  as 
corporations. 

Our  fathers  had  been  to  a  great  school  and  they  had 
learned  a  great  lesson.  They  had  learned  that  govern- 
ment must  be  by  sovereignty  and  not  by  contract.  The 
Confederation  of  1781  was  government  by  contract.  The 
framers  of  our  Constitution,  therefore,  wisely  decided 
that  the  individual  is  the  only  proper  subject  of  govern- 


Life  Insurance  and  Our  Dual  Citizenship        295 

ment,  and  that  national  sovereignty  is  derivable  only  from 
him.  A  free  government  cannot  be  made  out  of  states 
or  colonies  or  corporations  as  such.  A  government  if  free 
and  effective  must  be  a  government  of,  by  and  for  men. 

And  yet,  notwithstanding  the  business  chaos,  the  local 
bitternesses,  and  the  national  impotence  that  sprang  from 
the  Confederation,  so  great  was  the  fear  of  centralized 
power  that  into  the  framework  of  our  Constitution  some 
Confederation  ideas  were  interwoven,— notably  the  selec- 
tion of  the  United  States  Senate,  which  the  Constitution 
intended  should  not  be  chosen  by  the  people,  but  by  the 
Legislatures  of  the  various  States. 

Time  and  experience  are  gradually  eliminating  every 
vestige  of  the  Confederation  idea.  The  history  of  Con- 
stitutional development  shows  clearly  that  the  clauses 
which  represent  that  idea  have  steadily  lost  prestige. 
They  have  not  only  lost  relatively,  but  absolutely.  The 
tendency  of  national  development  is  unmistakable. 

Citizens  of  one  State  have  continually  come  into  closer 
and  wider  relations  with  citizens  of  other  States  only  to 
find  that,  notwithstanding  their  various  domiciles,  they 
are  fellow-citizens,  and  that  this  common  citizenship  is 
pregnant  with  possibilities  beyond  the  reach  of  citizen- 
ship in  any  single  State.  These  relations  have  changed 
the  whole  point  of  view,  advanced  the  people  of  the  coun- 
try into  a  new  world.  The  development  has  not  been  the 
result  of  any  plan  or  plot,  as  some  extremists  claim.  It 
has  come  from  the  irresistible  force  of  events.  The  cen- 
tral government  has  been  obliged  from  time  to  time  to 
reflect  this  development,  but  it  has  always  been  slow  to 
act.  It  has  acted  only  when  forced  to  do  so.  It  has  fre- 
quently been  tardy.  It  is  tardy  now.  We  are  as  a  people 
suffering  from  the  hesitancy  of  the  Federal  power,  not 
from  its  aggression.  The  Federal  power  and  the  Federal 


296  Militant  Life  Insurance 

idea  have  been  forced  to  advance,— development  has  com- 
pelled it. 

Contrast  the  attitude  of  the  people  to-day  with  their 
attitude  in  1789.  Then  their  affections  were  centered  in 
the  several  States.  The  people  of  each  State  looked  with 
more  or  less  hostility  upon  the  people  of  the  other  States. 
They  regarded  with  grave  anxiety  the  new  plan  upon 
which  they  had  entered.  The  adoption  of  this  plan  long 
trembled  in  the  balance,  and  nowhere  was  the  fight  over 
its  adoption  more  doubtful  and  more  bitter  than  in  the 
State  of  New  York.  Now  the  affections  of  the  people  are 
centered  in  the  Union.  Affection  for  the  State  is  perhaps 
no  less,  but  with  the  development  of  a  national  conscious- 
ness, a  realization  of  the  power  and  advantages  which 
spring  from  a  mighty  national  life,  has  come  a  newer,  a 
wider,  a  more  compelling  patriotism,— a  patriotism  which 
overleaps  all  State  boundaries  and  gives  unity  as  well  as 
vitality  to  the  people's  work. 

This  broader  patriotism  makes  it  impossible  for  the 
people  to  take  too  seriously  the  assertion  that  the  several 
States  are  sovereign.  Sovereignty  is  a  rather  general 
word,  but  to  the  average  citizen  it  means  a  very  definite 
thing.  It  means  Washington,  and  not  Albany,  or  Boston, 
or  any  State  Capital,  in  any  broad  sense.  It  means  the 
American  flag,  it  means  the  ideals  at  which  the  Fathers 
aimed,  for  the  achievement  of  which  they  planned.  It 
means  the  power  that  lies  in  our  citizenship,— not  in  any 
State— but  in  the  United  States. 

Business  has  been  the  great  instrumentality  which  has 
broken  down  the  imaginary  barriers  which  formerly 
divided  us.  We  move  freely  about  amongst  the  States. 
Many  of  us  during  our  lives  have  established  citizenship 
in  several  States.  We  found  that  Colorado  was  just  as 
much  our  country  as  Vermont,  South  Carolina  just  as 
much  our  land  as  Oregon. 


Life  Insurance  and  Our  Dual  Citizenship        297 

But  there  has  never  been  a  moment  since  1789  when 
the  seeming  conflict  between  National  power  and  the 
Rights  of  the  States  has  not  been  in  the  hearts,  if  not  on 
the  lips,  of  our  citizens  and  lawmakers.  The  Nation  has 
grown  up  like  a  sturdy  oak,  and  it  stands  to-day  truly  the 
wonder  of  all  other  nations— not  only  vigorous  and  beau- 
tiful, but  still  developing.  That  it  can  and  must  develop 
still  further  is  not  only  our  belief,  but  is  almost  a  world 
necessity.  This  belief  was  lately  challenged,  however,  by 
a  man  justly  eminent  and  distinguished— Hon.  Elihu  Root, 
junior  Senator  from  the  State  of  New  York. 

It  is  curious  that  such  a  challenge  should  come  and 
come  repeatedly  from  the  Empire  State. 

Governor  Hughes  first  announced  it  locally  when  he 
declared  that  legitimately  conducted  life  insurance  com- 
panies not  only  could  become  a  menace  to  the  public 
through  sheer  size,  but  that  certain  companies  were  al- 
ready too  large.  New  York  has  actually  written  this  idea 
into  her  statute  book.  Now  comes  Senator  Root,  repre- 
senting the  national  citizenship  of  New  York,  offering 
the  same  gloomy  doctrine  for  application  to  our  national 
development. 

Answering  a  plea  which  I  made  at  the  annual  dinner 
of  the  National  Civic  Federation  on  November  23,  1909, 
asking  that  Congress  act  under  the  commerce  clause  of 
the  Constitution  and  declare  all  interstate  insurance 
transactions  to  be  interstate  commerce,  the  distinguished 
Senator,  opposing  the  suggestion,  said: 

"Already  the  Administration,  already  the  judicial  power, 
already  the  legislative  branches  of  our  government,  are 
driven  to  the  limit  of  their  power  to  deal  intelligently  with 
the  subjects  that  are  before  them." 

Such  testimony  from  such  a  witness  is  startling  as 
well  as  amazing.  It  is  startling  because,  if  it  states  facts, 


298  Militant  Life  Insurance 

then  either  our  Federal  plan  has  reached  its  zenith,  or  we 
need  a  new  lot  of  men  in  Washington  and  a  reorganization 
of  the  governmental  plant.  Any  opinion  on  such  matters 
expressed  by  Senator  Root  is  entitled  to  respectful  con- 
sideration, but  I  am  inclined  to  think  he  is  mistaken 
in  his  picture  of  a  central  government— either  much  over- 
burdened or  else  much  over-valued.  The  Senator  made 
the  foregoing  statement  after  saying  this : 

"The  interdependence  of  life,  wiping  out  State  lines,  the 
passing  to  and  fro  of  men  and  merchandise,  the  intermingling 
of  the  people  of  all  sections  of  our  country  without  regard  to 
State  lines,  create  a  situation  in  which  from  every  quarter  of 
the  horizon  come  cries  for  Federal  control  of  business  which 
is  no  longer  confined  within  the  limits  of  separate  States." 

This  cry  for  Federal  control  is  a  necessary  result  of 
the  obliteration  of  State  lines  which  has  followed  the 
developments  of  a  hundred  years  of  national  life.  Is 
that  development  undesirable?  Is  it  unsound?  Is  it 
artificial?  Is  it  detrimental  to  any  interest  that  is  really 
local?  Is  it  in  any  way  hostile  to  the  avowed  purpose  of 
the  fathers  who  drafted  our  great  charter  in  order  to 
1  'establish  justice,  *  *  *  promote  the  general  wel- 
fare, and  secure  the  blessings  of  liberty "  as  well  as 

"In  order  to  form  a  more  perfect  union"? 

The  answer  is  that  the  purposes  of  the  Constitution, 
as  expressed  in  its  preamble,  could  not  have  been  realized 
in  any  other  way:  not  merely  because  our  national 
greatness  has  come  that  way,  but  because  at  about 
every  point  where  our  growth  has  been  retarded,  in  about 
every  crisis  which  involved  national  continuity  and  power, 
we  have  had  to  defeat  an  attempt  to  depart  from  these 
lines  of  growth.  Every  development  of  the  past  hundred 
years  has  been  ineffective  so  far  as  it  has  halted  short  of  a 


Life  Insurance  and  Our  Dual  Citizenship        299 

full  compliance  with  the  fundamental  fact  that  the  central 
government  acts  directly  on  the  citizen,  that  it  acts  for  the 
whole  people,  that  its  sovereignty  is  complete  and  that 
justice  for  all  the  people  cannot  be  administered  through 
any  other  instrumentality.  The  cries  from  all  parts  of  the 
horizon  which  assail  Senator  Root's  ears  are  protests  against 
arrested  development,— they  are  demands  for  that  larger 
opportunity  which  is  ours  by  right  of  the  citizenship  ex- 
plicitly granted  to  each  of  us  in  the  Constitution  and  re- 
stated in  the  XIV  amendment,  a  citizenship  greater  and 
finer  than  fealty  to  any  State  and  not  in  any  way  hostile 
to  local  rights. 

The  citizenship  which  first  gave  us  a  place  in  the 
world  and  a  future,  was  our  citizenship  under  the  Con- 
stitution. Without  that  our  other  citizenship  was  mean- 
ingless to  the  world,  and  to  ourselves  a  cause  of  discord, 
reprisals,  civil  chaos  and  commercial  war.  Except  as  re- 
strained by  devotion  to  our  duties  and  rights  under  our 
larger  citizenship,  local  citizenship  still  takes  on  those 
tendencies  now  whenever  the  interests  of  citizens  of  one 
State,  obeying  a  natural  law,  expand  and  include  or 
affect  the  interests  of  citizens  of  sister  States. 

It  will  be  necessary  to  notice  a  little  more  in  detail  by 
what  means  and  through  what  power  the  enlarged  ideas 
of  the  people  have  been  made  effective  in  a  country  whose 
fundamental  law  is  a  written  Constitution,  whose  central 
government  is  supposed  to  be  one  of  strictly  enumerated 
powers.  How  have  the  needs  of  the  people,  and  how  has 
public  opinion  reached  and  modified  the  supreme  law  of 
the  land?  Because  it  has  been  modified;  national  develop- 
ment has  compelled  it.  As  a  matter  of  fact,  ours  is  not 
wholly  a  government  of  enumerated  powers.  The  powers 
of  the  legislative  branch  of  the  central  government  are  in  a 
broad  and  general  way  enumerated.  On  the  other  hand,  the 
grant  of  power  to  the  Judiciary  is  complete.  The  theory 


300  Militant  Life  Insurance 

on  which  the  Constitution-makers  proceeded  in  providing 
for  this  branch  of  the  Federal  government  was  almost 
exactly  the  reverse  of  the  theory  on  which  they  proceeded 
in  creating  the  legislative  branch.  Congress  may  legis- 
late only  along  those  lines  which  the  Constitution  enumer- 
ates. Anything  not  fairly  coming  under  the  enumerated 
grants  of  power  is  reserved  to  the  States,  or  to  the 
people  of  the  United  States.  To  the  Federal  Judiciary 
a  complete  grant  of  power  was  made.  This  was  later  modi- 
fied by  the  Eleventh  Amendment,  and  of  course  can  be 
further  modified  by  amendments  made  in  the  constitutional 
way.  But  it  is  entirely  a  mistake  to  assume  that  the 
Judiciary  and  the  Executive — two  out  of  the  three  great 
branches  of  the  Federal  government— are  limited  in  their 
activities  by  specific  grants  particularly  enumerated. 

No  judicial  tribunal  in  the  history  of  free  government 
has  ever  been  vested  with  power  equal  to  that  belonging 
to  the  Supreme  Court  of  the  United  States.  Under  no 
other  Constitution — written  or  unwritten— has  it  ever  been 
possible  for  a  statute  which  has  been  legally  and  regu- 
larly passed  by  the  Legislative  department  of  govern- 
ment to  be  declared  void  by  the  courts.  The  Supreme 
Court  has  not  only  been  clothed  with  power  through  its 
unrestricted  authority  from  the  people  to  deal  with  prob- 
lems as  they  have  arisen,  but  it  has  really  been  clothed 
with  authority  to  say  how  far  the  enumerated  powers  of 
Congress  reach.  Acting  under  what  it  assumes  to  be  its 
rights,  and  operating  along  the  lines  of  one  of  the  grants 
of  authority  made  to  it  by  the  people,  Congress  legis- 
lates; but  it  does  not  follow  that  its  statute  will  stand. 
The  Supreme  Court  may  declare  it  null  and  void.  On 
the  other  hand,  if  Congress,  responding  to  a  demand  of 
public  opinion,  legislates  along  lines  which  might  seem  to 
be  not  specifically  covered  by  any  grant  in  the  Constitu- 
tion, that  action  is  valid  and  part  of  the  law  of  the  land 


Life  Insurance  and  Our  Dual  Citizenship        301 

if  its  validity  comes  before  the  Supreme  Court  and  is 
sustained. 

Whether  or  not,  as  some  writers  have  held,  the  whole 
of  the  English  Constitution  was  implied  in  our  Federal 
Constitution,  is  an  academic  question,  because  under  the 
extraordinary  powers  of  our  Supreme  Court  an  unwritten 
Constitution  has  been  growing  up  in  a  manner  corre- 
sponding to  that  in  which  the  Constitution  of  England  has 
grown  up.  A  common  remark  by  writers  on  this  subject 
is  that  we  have  no  Federal  common  law,  but  the  Federal 
Supreme  Court,  in  the  great  case  of  Kansas  vs.  Colorado,* 
held  to  the  contrary,  stating  emphatically  that  the  Court 
was  erecting  from  day  to  day  a  body  of  definitions,  pre- 
cepts, rules  of  action,  etc.,  which  could  be  properly 
described  by  no  other  name.  Here  then  has  been  and  is 
the  power  to  deal  with  this  never-ending  conflict,  this  zone 
of  debatable  questions.  Here  has  been  and  is  the  power 
which  has  developed  the  fundamental  law  as  the  relations 
between  the  Nation  and  the  States  have  changed. 

Prof.  Washburne,  of  Indiana  University,  has  recently 
called  attention  to  the  fact  that  the  written  Constitution 
has  not  been  amended  in  the  Constitutional  way  in  over 
one  hundred  years,  and  to  the  probability  that  it  never 
will  be  amended  again  in  that  way.  The  statement  is  en- 
tirely correct  The  Thirteenth,  Fourteenth  and  Fifteenth 
Amendments  were  adopted  in  a  period  of  revolution.  All 
the  State  Legislatures  did  not  vote  on  them,  and  if  they 
had,  they  would  never  have  supported  them.  The  pro- 
posed amendment,  making  a  Federal  income  tax  constitu- 
tional, is  almost  certain  to  fail. 

But  the  Constitution  has  been  changed  nevertheless, 
and  it  will  be  changed  again.  Whatever  the  demands  of 
the  Nation's  growth  and  of  the  Nation's  welfare  may  be, 
whatever  new  and  strange  governmental  problems  may 

*206  U.  S.  46  (at  96). 


302  Militant  Life  Insurance 

arise,  the  unwritten  Constitution  and  the  Supreme  Court 
will  be  equal  to  them. 

It  goes  without  saying  that  every  detail  of  govern- 
ment which  can  be  dealt  with  locally  and  carry  out  the 
high  purposes  of  the  Constitution,  should  be  dealt  with 
locally.  There  never  was  any  danger  that  really  local 
affairs  would  be  interfered  with  by  the  Federal  Govern- 
ment. They  never  have  been;  they  never  will  be  unless 
such  interference  becomes  necessary  to  the  execution  of 
some  general  power  of  the  government.  There  never 
was  any  body  of  public  opinion  which  would  tolerate 
such  a  condition  for  a  moment.  No:  the  trouble  has  all 
come  the  other  way.  Local  governments  have  interfered 
with  what  was  national  in  its  scope.  They  are  interfering 
now,  or  rather  they  are  doing  what  the  general  govern- 
ment ought  to  do  and  neglects  to  do,  and  they  are  doing 
it  very  badly. 

Over  the  question  of  whether  a  State  could  break  the 
bonds  that  bind  the  citizen  under  the  direct  sovereignty  of 
the  United  States,  a  fearful  war  was  waged— and  the  dis- 
tinctive principle  which  makes  this  a  Nation  and  not  a 
Confederation  was  vindicated  and  irrevocably  established. 
Yes,  the  central  government  is  your  government  and 
mine,  ours  directly,  with  no  person  or  corporation  or 
State  intervening.  Without  that  principle  we  could  never 
have  become  a  nation.  It  cost  so  much  to  reaffirm  the  fact 
that  there  can  be  no  doubt  about  the  purpose  of  the  people 
under  it. 

It  is  elementary  that  no  business  which  takes  on  a 
national  character  can  be  economically  or  efficiently  regu- 
lated by  the  several  States.  The  history  of  the  old  Con- 
federation, with  its  "organized  and  carefully  barricaded 
impotence ",  tells  what  happened  and  what  always  will 
happen  under  a  confederation.  It  tells  what  is  happen- 
ing now. 


Life  Insurance  and  Our  Dual  Citizenship        303 

Cries  for  Federal  control  are  the  growing  pains  of 
a  great  people.  Let  Senator  Root  and  all  others  who  are 
leaders  make  no  mistake.  The  people  of  the  country  are 
not  afraid  of  themselves,  and  they  are  no  more  doubtful 
of  their  power  as  citizens  of  the  United  States  than  they 
are  of  their  power  as  citizens  of  the  States.  They  see 
their  opportunity  and  they  will  not  run  away  from  it.  On 
the  contrary  they  will  crowd  every  opportunity.  Having 
a  given  thing  to  do  in  common,  no  one  can  persuade  them 
that  they  cannot  do  it  better  by  doing  it  once  for  all  than 
by  doing  it  forty-six  times.  No  one  can  persuade  them 
that  efficiency  and  economy  and  national  greatness  and 
their  own  best  interests  do  not  lie  along  Federal,  rather 
than  Confederation,  lines.  Not  even  sympathy  for  the 
alleged  burdens  of  Washington  can  so  blind  the  average 
citizen  that  he  will  not  see  the  infinitely  heavier  burden, 
the  vastly  greater  expense  and  the  hopeless  confusion 
which  lie  in  forty-six  separate,  sovereign  administrators 
over  a  common  interest. 

The  commercial  anarchy  which  existed  in  1787  and 
compelled  the  formation  of  the  Union  was  not  different 
except  in  degree  from  the  anarchy  which  exists  to-day 
under  State  laws  relating  to  Divorce,  Bills  of  Lading, 
Negotiable  Instruments,  the  Law  of  Sales,  Warehouse 
Receipts,  Common  Carriers  of  Freight,  the  Formation 
of  Corporations,  the  Supervision  of  Insurance,  etc.,  al- 
though progress  toward  uniformity  of  legislation  by  the 
States  has  been  made  on  some  of  these  subjects.  Now,  as 
in  1787,  each  State  legislates  selfishly.  Then  the  Colonies 
which  had  seaports  oppressed  and  robbed  those  with  no 
seaports.  This  was  not  bettered  by  attempts  to  get  to- 
gether as  States  under  the  Confederation.  That  attempt 
merely  made  matters  worse  because  it  showed  how  much 
power  for  evil  a  single  State  had  in  any  legislation  that 
affected  all  the  States.  Attempts  at  uniform  action  by 


304  Militant  Life  Insurance 

the  States  now  will  succeed  better,  not  because  the  at- 
tempt is  economically  any  sounder  than  under  the  Con- 
federation, but  because  of  the  overshadowing  importance 
and  power  of  our  national  citizenship.  All  attempts  by 
any  so-called  " House  of  Governors",  or  by  Commissions 
on  Uniform  State  Laws,  must  fail  in  1910  as  they  failed 
in  1787,  only  perhaps  less  hopelessly  because  the  hostility 
that  then  existed  between  the  States  has  substantially  dis- 
appeared under  the  " commerce  of  men  and  merchandise" 
which  has  led  to  a  demand  for  more  Federal  control. 

Again,  a  given  transaction  may  be  local  to-day  and 
interstate  to-morrow.  If  an  act  to-day  naturally  and 
properly  involves  the  right  of  no  citizen  resident  in  any 
other  State  of  the  Union,  then  that  act  is  local  and  not 
in  any  way  subject  to  Federal  control.  But  suppose 
through  impulses  imparted  by  science,  by  invention,  by 
social  readjustments,  by  perfected  transportation,  the 
same  transaction  comes  to  involve  the  rights  of  citizens 
in  another  State,  the  rights  of  citizens  in  ten  other  States, 
in  forty-five  other  States?  What  then?  How  shall  such 
citizens  protect  themselves?  Through  the  law  of  the 
claw?  By  retaliation — as  we  did  in  1787  and  as  we  do 
now  in  insurance  supervision?  Or  shall  we  find  relief 
and  justice  through  the  rights  granted  under  our  citizen- 
ship in  the  nation  ? 

Life  insurance— what  it  is,  what  it  means,  what  it 
does,  how  it  operates  socially  and  financially— has  never 
been  fairly  presented  to  the  Supreme  Court.  Un- 
fortunately insurance  was  in  1869  declared  by  the  Su- 
preme Court  not  to  be  interstate  commerce.  The  three 
decisions  relied  upon  by  opponents  of  the  national 
supervision  of  life  insurance  are  that  in  Paul  vs.  the  State 
of  Virginia,  rendered  in  1869  and  relating  entirely  to  fire 
insurance;  that  in  Hooper  vs.  the  State  of  California, 
rendered  in  1895,  and  relating  entirely  to  marine  insur- 


Life  Insurance  and  Our  Dual  Citizenship        305 

ance;  and  that  in  New- York  Life  Insurance  Company  vs. 
Cravens,  rendered  in  1900,  relating  to  the  validity  of  a 
statute  of  Missouri,  in  which  the  plea  that  the  subject 
matter  was  interstate  commerce  was  made  incidentally. 

In  the  first  case  the  Court  decided  that  fire  insurance 
policies  were  not  articles  of  commerce — something  having 
an  existence  and  value  independent  of  the  parties  to  them 
— but  were  contracts  of  indemnity  against  loss  by  fire.  In 
the  second  case  the  Court  quoted  from  Paul  vs.  Virginia 
and  said  a  contract  of  insurance  was  not  an  instrumentality 
of  commerce,  but  a  mere  incident  of  commercial  inter- 
course, and  that  there  was  no  difference  in  this  respect 
between  insurance  against  fire  and  insurance  against  "the 
perils  of  the  sea".  In  the  third  case  the  Court  referred 
to  the  other  two  decisions,  quoted  the  statement  that  there 
was  no  difference  between  insurance  against  fire  and  in- 
surance against  the  perils  of  the  sea,  and  said— "  And  we 
add,  or  against  the  uncertainty  of  man's  mortality."* 


In  Paul  vs.  Virginia,  the  Court  said: 

*"Issuing  a  policy  of  insurance  [i.  e.,  fire  insurance]  is  not  a 
transaction  of  commerce.  The  policies  are  simply  contracts  of 
indemnity  against  loss  by  fire,  entered  into  between  the  corpora- 
tion and  the  assured  for  a  consideration  paid  by  the  latter.  These 
contracts  are  not  articles  of  commerce  in  any  proper  meaning  of 
the  word.  They  are  not  subjects  of  trade  and  barter  offered  in 
the  market  as  something  having  an  existence  and  value  indepen- 
dent of  the  parties  to  them.  They  are  not  commodities  to  be 
shipped  or  forwarded  from  one  State  to  another  and  then  put 
up  for  sale.  They  are  like  other  personal  contracts  between 
parties  which  are  completed  by  their  signature  and  transfer  of 
the  consideration.  Such  contracts  are  not  interstate  transactions, 
though  the  parties  may  be  domiciled  in  different  states.  The 
policies  do  not  take  effect — are  not  executed  contracts — until 
delivered  in  the  State  of  Virginia.  They  are  then  local  trans- 
actions, and  are  governed  by  the  local  law." — 8  Wallace,  168. 

In  the  second  case  the  Court  quoted  from  the  decision  in  Paul  vs. 

Virginia  and  argued  that  the  attempt  to  show  that  marine  insurance 

is  interstate  commerce 

"ignores  the  real  distinction  upon  which  the  general  rule  and 
its  exceptions  are  based,  and  which  consists  in  the  difference 
between  interstate  commerce  or  an  instrumentality  thereof  on 


306  Militant  Life  Insurance 

Life  insurance  is  thus  disposed  of  in  just  ten  words, 
and  those  ten  words  assert  its  identity  in  nature  with  fire 
and  marine  insurance.  A  full  discussion  of  the  subject 
would  necessarily  note  the  following  points  of  dissimi- 
larity : 

1.  A  short  term  life  policy  without  the  privilege,  of 
renewal  is  not  quite  of  the  same  nature  as  fire  and  marine 
policies;  a  life  or  endowment  policy  issued  on  the  level 
premium  plan  presents  very  material  points  of  difference. 

2.  In  1869  when  the  decision  in  Paul  vs.  Virginia  was 
rendered,  life  insurance  policies  as  usually  issued  had  no 
guaranteed  cash  value— their  value  was  contingent  upon 
the  death  of  the  insured.     They  now  have  both  a  contin- 
gent and  a  cash  value. 

3.  In  fire  and  marine  insurance  the  thing  insured  is 
a  subject  of  commerce;  in  life  insurance  there  is  legally 
no  traffic  in  the  thing  insured,  although  the  most  impor- 
tant traffic  between  the  States  is  the  interchange  of  men 

the  one  side  and  the  mere  incidents  which  may  attend  the  carry- 
ing on  of  such  commerce  on  the  other." 

*  *  *  "The  business  of  insurance  is  not  commerce.  The  con- 
tract of  insurance  is  not  an  instrumentality  of  commerce.  The 
making  of  such  a  contract  is  a  mere  incident  of  commercial  inter- 
course, and  in  this  respect  there  is  no  difference  between  insur- 
ance against  fire  and  insurance  against  the  'perils  of  the  sea.'  " — 
155  U.  S.,  648. 

In  the  third  case  the  Court  said: 

"That  the  business  of  fire  insurance  is  not  interstate  com- 
merce is  decided  in  Paul  vs.  Virginia  [others  given].  That  the 
business  of  marine  insurance  is  not  is  decided  in  Hooper  vs.  Cali- 
fornia [and  others  given].  In  the  latter  case  it  is  said  that  the 
contention  that  it  is  involves  an  erroneous  conception  of  what 
constitutes  interstate  commerce." 

"We  omit  the  reasoning  by  which  that  is  demonstrated,  and 
will  only  repeat  [From  Hooper  vs.  California].  The  business  of 
insurance  is  not  commerce.  The  contract  of  insurance  is  not  an 
instrumentality  of  commerce.  The  making  of  such  a  contract  is  a 
mere  incident  of  commercial  intercourse  and  in  this  respect  there 
is  no  difference  between  insurance  against  fire  and  insurance 
against  'the  perils  of  the  sea'.  And  we  add,  or  against  the  un- 
certainty of  man's  mortality."— 176  U.  S.,  389. 


Life  Insurance  and  Our  Dual  Citizenship        307 

and  the  mere  transportation  of  them  is  interstate  com- 
merce; but  the  policy  of  life  insurance  itself  represents 
such  a  buying  and  selling,  is  so  completely  negotiable,  so 
clearly  represents  a  value  that  may  be  traded  in,  and  has 
come  to  be  such  an  important  item  in  credit  as  well  as  in 
interstate  and  even  international  relations,  that  if  it  is 
not  interstate  commerce,  it  is  difficult  to  understand  what 
interstate  commerce  is. 

In  the  "Lotteries"  case  the  Supreme  Court  found  that 
lottery  tickets  had  both  a  contingent  and  an  actual  value, 
and  declared  that  they  were  therefore  subjects  of  com- 
merce.* If  national  supervision  of  life  insurance  was 
fairly  brought  before  the  Supreme  Court  by  the  affirma- 
tive action  of  Congress,  by  a  Federal  law  declaring  inter- 
state insurance  transactions  to  be  interstate  commerce, — 
as  traffic  in  lottery  tickets  was  by  the  statute  of  March  2, 
1895, — I  believe  the  Court  would  do  what  it  has  fre- 
quently done  before — change  its  mind.  Such  a  change 
of  view  would  be  in  perfect  accord  with  the  Court's 
changed  attitude  on  the  subject  of  admiralty  jurisdiction, 
the  right  of  the  national  government  to  issue  legal  tender 
notes,  and  the  validity  of  State  laws  relating  to  inter- 
state commerce  in  the  absence  of  Federal  laws.t 


•Champion  vs.  Ames,  188  U.  S.,  492. 

f"In  1825  in  the  admiralty  case  of  The  Thomas  Jefferson  the 
Supreme  Court  of  the  United  States,  in  an  opinion  delivered  by  Mr. 
Justice  Story,  in  which  the  great  Chief  Justice  John  Marshall  con- 
curred, declared  that  the  admiralty  jurisdiction  of  the  Federal  Gov- 
ernment did  not  extend  to  the  Missouri  River  because  the  sea  did 
not  ebb  and  flow  in  this  river,  and  that  while  it  was  commercially 
navigable,  legally  it  was  not  navigable.  But  the  same  Court  in  the 
admiralty  case  of  The  Genese  Chief,  in  1851,  in  an  opinion  delivered 
by  Mr.  Chief  Justice  Taney,  overruled  this  doctrine  and  held  that 
Lake  Ontario  was  not  only  commercially  but  legally  navigable,  even 
though  the  sea  did  not  ebb  and  flow  in  that  body  of  water,  and  the 
same  Court  has  since  applied  the  same  doctrine  to  rivers  and  even 
to  canals.  It  was  intimated  by  the  Supreme  Court  of  the  United 
States  in  the  License  Cases  decided  in  1847,  that  in  the  absence  of 
Congressional  action,  interstate  commerce  could  be  clogged  and  im- 


308  Militant  Life  Insurance 

The  line  of  demarcation  between  local  and  national 
affairs  is  not  difficult  to  ascertain.  It  has  been  well  stated 
by  Mr.  Francis  B.  James,  of  the  Cincinnati  Bar,  and  is 
this:  All  business  transactions  between  residents  of  dif- 
ferent States  is  interstate  commerce.  No  other  rule  will 
answer  the  needs  of  our  people,  and  any  other  rule  falls 
short  of  the  power  ceded  to  Congress  in  Paragraph  3, 
Section  8,  Article  I  of  the  Constitution.  Congress  will 
so  legislate  some  day— under  the  pressure  of  public  neces- 
sity and  under  the  leadership  of  men  who  neither  fear  the 
phantom  of  the  old  Confederation  nor  the  bogie  of  cen- 
tralized power. 

The  centralization  of  power,  so-called,  in  Washington 
is  always  a  centralization  of  delegated  power.  The  real 
power  remains  always  in  the  people.  This  is  the  fundamen- 
tal superiority  of  the  Anglo-Saxon  Plan  over  the  Roman 
Plan,  and  it  answers  in  advance  the  arguments  of  the 
alarmists  who  see  a  Caesar  some  day  sitting  in  the  seat  of 
George  Washington. 

Centralization  in  Washington  is  centralization  of  ad- 
ministration. The  seat  of  power  is  unchanged.  Wash- 
ington acts  on  behalf  of  the  same  people  for  which  the 


peded  by  State  legislation;  but  this  was  emphatically  repudiated  in 
1867  in  the  Iowa  Liquor  Cases  in  which  the  same  Court  receded  from 
its  former  position  and  declared  that  in  the  absence  of  Congressional 
action  interstate  commerce  should  be  free.  There  is,  therefore,  hope 
that  some  day  the  Supreme  Court  of  the  United  States  will  give  the 
full  commercial  meaning  to  the  word  commerce  and  lay  down  one 
broad  rule  that  all  business  transactions  between  residents  of  different 
States  is  interstate  commerce." 

-LEGAL  AND  COMMERCIAL  ASPECT  OF  BILLS  OF  LADING, 

An  address  by  Francis  B.  James,  of  the  Cincinnati  Bar ;  President  of  the  Ohio 
Board  of  Uniform  State  Laws ;  Chairman  of  the  Committee  on  Commercial 
Law  of  the  Commissioners  on  Uniform  State  Laws  in  National  Conference. 

10  Wheaton,  428  (6  Law  Ed.,  426) ; 
12  Howard,  464  (13  Law  Ed.,  1067); 

5  Howard,  504  and  507  (12  Law  Ed.,  256); 

5  Wallace,  480;  5  Wallace,  462  (18  Law  Ed.,  497). 


Life  Insurance  and  Our  Dual  Citizenship        309 

State  acts.  Washington's  power  is  the  same  sort  of  power 
that  the  State  has.  It  is  derived  from  the  same  source, 
and  bound  by  like  limitations.  It  is  inspired  by  the  same 
purpose,  except  that  its  patriotism  is  as  wide  as  the  na- 
tion, not  as  narrow  as  a  State.  Centralization  means 
efficiency;  it  means  justice.  No  extension  of  Federal 
authority  in  our  whole  national  life  has  ever  resulted 
in  anything  but  greater  efficiency,  more  perfect  justice 
and  instant  growth.  "Who  even  amongst  those  who 
fear  the  Federal  power  would  undo  what  has  been 
done?  Who  would  turn  the  control  of  our  banking  and 
currency  back  to  the  States?  Who  regrets  that  Jefferson 
overcame  his  scruples  about  the  purchase  of  Louisiana? 
Who  would  wipe  out  the  Interstate  Commerce  Act?  Who 
that  is  responsible  for  any  considerable  business,  would 
not  like  to  see  Congress  go  to  the  limit  of  its  power  under 
the  commerce  clause? 

Let  us  observe  now  some  striking  instances  in  which 
our  unwritten  Constitution  coming  into  direct  conflict  with 
the  fundamental  written  law  has  overborne  it,  and  some 
further  instances  which  show  how  rapidly  the  Confedera- 
tion idea  is  being  eliminated  from  our  plan  of  government. 

Presidential  electors  now  exercise  no  personal  choice 
in  electing  the  President.  It  would  be  really  unconstitu- 
tional for  them  to  do  so.  But  the  written  Constitution 
intended  they  should  exercise  a  personal  choice,  and  so 
provides. 

Some  States  now  elect  Senators  by  the  direct  vote  of 
the  people,— the  legislature  merely  confirming  the  choice 
thus  made.  The  written  Constitution  clearly  provides 
for  a  choice  by  the  legislature  as  a  counter  check  to  the 
direct  method  of  electing  the  House. 

Until  Jackson's  time  no  President  vetoed  a  measure 
merely  because  he  did  not  approve  of  it.  He  exercised 
the  veto  power  only  on  constitutional  grounds.  Now 


310  Militant  Life  Insurance 

a  President  vetoes  any  measure  he  does  not  approve  of 
for  any  reason  which  seems  to  him  sufficient. 

The  second  paragraph  of  the  XIV  amendment  clearly 
intended  to  reduce  the  repesentation  in  the  House  of 
Representatives  of  any  State  which  should  deny  the  negro 
the  right  to  vote.  This  was  followed  by  the  XV  amend- 
ment, which  was  intended  to  guarantee  to  the  colored 
man  the  right  of  franchise.  Does  the  colored  man  vote 
in  the  South?  If  not,  why  not?  Simply  because  the 
unwritten  Constitution  overbears  the  written  text,  and 
not  only  is  the  XV  amendment  nullified  but  in  part  at 
least  the  XIV  as  well.  Public  opinion  the  country  over 
will  not  tolerate  the  Southern  negro  at  the  polls,  and 
rather  than  force  such  an  issue,  opinion  even  winks  at 
the  question  of  the  constitutional  basis  of  representation. 

Originally  no  President  attempted  to  tell  Congress 
what  it  should  or  should  not  do.  Grover  Cleveland  forced 
the  repeal  of  the  Silver  Purchase  Act  in  1893.  Theodore 
Roosevelt  was  a  more  important  legislative  factor  during 
his  seven  years  of  service  than  Congress  itself.  Presi- 
dent Taft  forced  important  changes  in  the  recent  Tariff 
Law,  and  the  country  as  a  whole  is  now  more  interested 
in  what  he  intends  to  do  than  in  what  Congress  may  plan 
to  do. 

The  letter  of  the  law  is  mighty,  when  the  people 
support  it. 

Again,  observe  how  responsive  the  Supreme  Court  has 
been  to  the  changing  needs  of  the  Nation.  Observe  how 
it  has  interpreted  fundamental  law  on  the  theory  that 
the  law  was  made  for  the  people  and  not  the  people  for 
the  law. 

For  example,  notice  what  has  happened : 

The  government  one  day  could  not  issue  a  legal  tender 
note— the  next  day  it  could,  because  the  Supreme  Court 
changed  its  mind. 


Life  Insurance  and  Our  Dual  Citizenship        311 

A  Federal  income  tax  was  constitutional  one  day  and 
unconstitutional  the  next,  because  one  judge  changed  his 
mind. 

And  so  with  other  important  matters  where  the  growth 
of  the  country  had  created  new  conditions  which  a  wise 
court  was  bound  to  recognize. 

The  protest  of  insurance  against  the  excesses  of  forty- 
six  varieties  of  legislation,  forty-six  varieties  of  regula- 
tion, forty-six  varieties  of  taxation,  represents  an  acute 
form  of  a  general  protest. 

In  the  late  insurance  investigation  nothing  was  more 
clearly  shown  than  that  many  State  Legislatures  had  been 
systematically  blackmailing  the  companies.  Curiously 
enough,  at  the  time  the  newspapers  dwelt  more  on  the  mis- 
deeds of  the  companies  that  had  been  blackmailed  than 
they  did  on  the  doings  of  the  blackmailers.  But  the  peo- 
ple learned  a  lesson.  Small  wonder,  therefore,  that  the 
people  now  support  any  honest  executive,  State  or  Na- 
tional, who  shoulders  a  legislature  to  one  side  and  goes 
direct  to  the  mark.  But  if  the  people  in  single  States  find 
this  action  necessary,  what  is  the  condition  of  a  business 
that  must  deal  with  all  the  legislatures  in  the  Union? 
Do  not  the  evident  tendencies  of  government  itself  recite 
our  difficulties  and  justify  our  protest* 

Is  it  not  a  curious  view  that  a  man  acting  under 
his  State  citizenship  is  always  a  patriot,  and  acting 
under  his  National  citizenship  is  probably  a  tyrant? 
Does  the  citizen  act  any  less  directly  at  Washington 
than  at  the  capital  of  his  own  State  ?  Does  he  act  on  a  less 
intelligent  body  of  men?  Is  he  himself  less  to  be  trusted? 
Why  suppose  that  a  man  can  be  trusted  to  do  things  as 
a  citizen  of  New  York  that  he  cannot  be  trusted  to  do  as 
a  citizen  of  the  United  States? 

If  some  of  our  acts  as  citizens  of  New  York  affect  the 
citizens  of  Colorado,  why  should  they  not  have  something 


312  Militant  Life  Insurance 

to  say?  But  how  shall  they  speak?  Through  a  powerless 
House  of  Governors?  Through  agreements  which  can 
scarcely  ever  be  reached,  and  if  reached  would  neces- 
sarily be  complicated,  expensive,  inefficient,  and  liable 
to  change  through  the  whim  of  any  single  legislature? 
Or  shall  they  speak  in  the  way  provided— through  their 
national  citizenship? 

The  rights,  powers  and  possibilities  which  lie  in  our 
national  citizenship  have  evolved  slowly.  The  evolution  is 
still  going  on.  Nothing  except  national  decadence  can  stop 
it.  The  Supreme  Court  has  been  wise  enough  to  see  this, 
and  whenever  justice  and  national  development  de- 
manded such  action,  the  Court  has  been  big  enough  to 
change  its  mind.  That  is  all  that  is  necessary  now  in 
order  to  secure  Federal  control  of  interstate  insurance. 


Note. — While  this  book  was  passing  through  the  press  the  Su- 
preme Court  of  the  United  States  handed  down  a  decision  in  the  case 
of  an  assigned  life  policy,  holding  that  such  assignment  gave  the 
assignee  the  entire  proceeds  of  the  policy  without  reference  to  insur- 
able  interest.  The  bearing  of  this  decision  upon  the  foregoing  dis- 
cussion is  obvious — a  life  policy  is  a  thing  of  value  and  may  be  bought 
and  sold  and  transported.  Such  traffic  between  the  citizens  of  dif- 
ferent states  is  therefore  interstate  commerce. 


LIFE  INSURANCE  AND  THE  MAN 


Ax  ADDHKBB  BEFORE  A  CONFERENCE  OF  THE  PRINCIPAL  FIELDMEN  OF  THE  NEW- YORK 

LIFE  INSURANCE  COMPANY,  AT  THE  MT.  WASHINGTON  HOTEL,  BRETTON 

WOODS,  N.  H.,  THURSDAY,  SEPTEMBER  29,  1910 


WHAT  respect  is  the  work  of  life  insur- 
ance unique  ?  What  is  the  finest  thing  it 
does?  Not  what  is  its  greatest  achieve- 
ment, measured  as  we  measure  the  achieve- 
ments of  other  forces  in  society,  but  what 
particularly  unique  and  fine  thing  distin- 
guishes it?  In  what  important  field  is  it 
first,  indeed  almost  alone! 
We  dwell  on  the  wonderful  service  it  is  rendering— es- 
pecially in  the  great  companies— through  the  necessary  and 
large  accumulation  of  securities.  This  service  was  little 
thought  of  a  few  years  ago.  Now  all  the  world  wonders  at 
it,  and  all  the  politicians  try  to  make  it  pay  tribute.  But 
in  this  service  life  insurance  is  not  unique.  Other  great 
sections  of  organized  society  do  the  same  work.  The  sav- 
ings banks  do  it,  the  trust  companies  do  it,  although  neither 
holds  securities  for  such  a  high  service  or  so  completely 
divorced  from  all  the  influences  which  at  times  dislocate 
organized  effort  and  bring  ruin  through  violent  fluctua- 
tions in  values.  We  cannot,  therefore,  call  this  the  unique, 
the  finest  product  of  life  insurance. 

313 


314  Militant  Life  Insurance 

We  also  dwell,  and  naturally  so,  on  the  beneficence 
which  so  distinctively  marks  the  work  of  all  life  in- 
surance. And  they  present  a  wonderful  picture, — those 
millions  sent  daily  almost  with  the  speed  of  light  just 
where  they  will  do  the  most  good.  A  policy  maturing  in 
Alaska  is  worth  just  as  much  as  it  would  be  if  it  had 
matured  in  New  York,  and  the  beneficiaries  receive  its  pro- 
ceeds almost  as  quickly.  But,  by  way  of  comparison  and 
contrast,  we  are  told  that  the  coal  fields  of  Alaska  are  not 
for  this  generation.  They  exist  and  they  will  be  utilized 
sometime,  but  a  coal  field  located  in  Pennsylvania  or  Ohio 
or  Kentucky  is  much  more  valuable.  Here  are  questions  of 
location,  transportation,  availability,  etc.  All  these  ques- 
tions, including  the  question  of  immediate  usefulness,  are 
solved  for  the  insurant,  although  the  actual  securities  in  a 
great  life  insurance  company,  or  the  values  back  of  them, 
are  more  widely  scattered  over  the  earth  than  coal  fields  or 
wheat  fields  or  any  of  the  great  subjects  of  trade  and  com- 
merce. The  demand  for  coal  in  Alaska  cannot  by  any  pres- 
ent system  be  satisfied  because  there  is  available  coal  in 
Pennsylvania;  but  the  life  insurance  policy  which  matures 
in  Pennsylvania  or  Alaska  is  immediately  paid  because  there 
are  policy-holders  in  both  places.  Here,  again,  life  insur- 
ance is  far  in  advance  of  any  other  system  of  beneficence 
known  to  society.  But  while  it  is  more  efficient  than  other 
projects,  more  immediate  in  its  action,  more  substantial  in 
its  sources  of  responsibility  and  power,  it  is  not  in  this 
respect  unique.  Everywhere  there  are  great  foundations 
doing  similar  work.  There  are  hospitals,  orphanages  and 
homes  for  the  aged  and  indigent  with  millions  behind  them 
dedicated  solely  to  a  beneficence  which  is  fine  but  which  not 
infrequently  runs  into  charity.  No,  even  this  beneficence, 
which  is  naturally  considered  by  many  people  to  be  the 
beginning  and  the  end  of  life  insurance,  is  not  its  unique, 
not  its  finest  work. 


Life  Insurance  and  the  Man  315 

If  you  begin  now  to  wonder  whither  I  am  leading,  I  shall 
not  be  surprised.  If  neither  the  direct  benefactions  of  life 
insurance  nor  its  service  to  the  industrial  and  commercial 
world  as  a  buyer  of  securities  constitute  its  unique,  its 
finest  service,  in  what  does  this  service  consist  ?  Mind,  I  do 
not  say  its  greatest  service.  I  purposely  use  the  words 
"unique"  and  "finest". 

One  of  the  noticeable  contrasts  between  Europe  and 
America  is  the  larger  number  of  insured  and  the  larger 
amount  of  life  insurance  per  capita  in  private  corporations 
in  America.  Why  is  this?  There  must  be  a  reason  for  it. 
Is  it  because  our  companies  are  more  aggressive  ?  Any  one 
who  has  had  experience  in  competition  with  the  companies 
of  England  and  of  the  Continent  may  claim  some  superi- 
ority for  our  organizations  in  that  respect,  but  this  will  not 
explain  the  difference.  Is  it  because  management  here  is 
more  efficient?  No,  except  as  environment  and  opportunity 
give  a  larger  field.  Can  it  be  explained  by  more  liberal 
contracts  or  larger  dividends?  None  of  these  things  fully 
explains  it.  In  Europe  generally  life  insurance  is  not  a 
separate  business.  It  is  an  addendum  to  something  else. 
It  is  not  carried  from  a  broad  conviction  of  the  responsi- 
bility and  frailty  of  the  individual,  an  understanding  of 
his  needs  and  an  appreciation  of  the  might  of  united  men. 
It  lacks  the  something  which  can  perhaps  best  be  described 
by  the  word  dignity.  On  the  other  hand,  here  life  insur- 
ance is  a  great  business  separate  and  apart  from  other 
kinds  of  business.  We  sometimes  write  life  insurance,  it  is 
true,  as  collateral  to  property  interests,  but  the  great  mass 
of  it  is  written  to  meet  the  social  obligations,  to  make  good 
the  value,  the  earning  capacity,  of  the  individual  man.  It 
is  written  and  carried  to  meet  a  peculiar  obligation  which 
the  man  feels  here  and  does  not  seem  to  have,  or  at  least 
not  to  feel  in  the  same  way,  in  other  countries  of  the  world. 

I  cannot  stop  to  trace  the  causes  which  have  created  the 


316  Militant  Life  Insurance 

present  conditions  of  society  on  either  side  of  the  Atlantic, 
—each  with  its  virtues,  each  with  its  faults.  But  it  is  ob- 
vious that  in  one  there  is  an  environment  favorable  to  large 
life  insurance  development,  in  the  other  an  environment 
which  does  not  lead  to  an  equally  great  result.  What  is  the 
particular  thing  in  our  environment  which  explains  this 
contrast,  and  what  part  does  life  insurance  play  in  utilizing 
that  environment  ? 

New  ideas  always  have  to  fight  against  the  habits,  cus- 
toms and  superstitions  of  society.  Life  Insurance  strikes  a 
lower  level  in  Europe  because  it  is  harassed  and  hindered 
by  habits  of  mind  which  are  the  legacy  of  centuries,  by  theo- 
ries of  government  under  which  individual  responsibility 
has  not  yet  fully  emerged.  In  the  United  States,  on  the 
other  hand,  individual  responsibility  has  emerged,  habits 
of  mind  are  forming,  customs  are  being  established, 
and  age-long  superstitions  have  substantially  been  elimi- 
nated. This  creates  the  peculiar  environment  in  which  the 
life  insurance  idea  has  found  its  opportunity.  In  the  mael- 
strom of  our  political  and  civil  life— with  Reformers  and 
Insurgents,  yellow  journals  and  muck-raking  magazines  all 
busy,  with  unmistakable  evidences  of  low  standards  of 
business  morality  and  abundant  proof  that  property  is 
reckless  of  the  rights  of  individuals,  it  is  not  easy  to  select 
any  one  feature  of  our  civilization  and  say — "This  proves 
that  a  sense  of  personal  responsibility  is  growing;  this 
proves  that  our  people  are  fair  after  all;  and  while  they 
are  eager  for  the  larger  rewards  which  our  theory  of  gov- 
ernment promises,  they  are  also  alive  to  their  duties  and 
responsibilities  and  are  making  provision  for  them." 

Can  we,  indeed,  with  confidence  point  to  any  phase  of 
our  civilization  and  say :  This  proves  that  duty  is  keeping 
pace  with  opportunity?  The  average  reformer  neither 
helps  nor  reassures  us  in  our  quest.  His  remedy,  where 
admitted  evils  exist,  is  the  deadly  and  destructive  use  of 


Life  Insurance  and  the  Man  317 

law.  "Put  these  men  in  stripes'*  cries  the  pulpit,  and  fre- 
quently the  pulpit  is  right.  "Crucify  them  by  public  rep- 
robation and  ostracism"  cries  the  muck-raker,  and  he  is 
frequently  right,  too ;  but  these  are  the  methods  of  despera- 
tion and  war.  They  create  nothing  and  cure  little.  If 
there  is  not  abundant  evidence  to  show  that  existing  evils, 
while  dangerous,  are  superficial,  and  that  the  great  body  of 
the  people  are  honest,  fair,  just  and  keenly  alive  to  the 
duties  through  which  alone  liberty  may  be  preserved,  our 
outlook  is  not  hopeful. 

We  accept  our  rights  and  our  opportunities  as  a  mat- 
ter of  course.  We  take  them  as  we  take  sunlight,  good 
water,  the  safety  of  property,  individual  security,  etc.,  not 
being  conscious  always  that  there  is  a  sharp  difference 
between  what  we  as  individuals  enjoy  and  what  the  indi- 
vidual citizenship  of  any  other  nation  enjoys.  Obligation 
and  opportunity  are  never  far  removed  from  each  other. 
Do  our  people,  consciously  or  unconsciously,  respond  to 
their  obligations  which  are  inseparable  from  their  oppor- 
tunities? No  charge  is  more  frequently  repeated  perhaps 
than  this,— that  every  man  in  the  United  States  assumes 
that  every  other  man  is  doing  his  duty  as  a  citizen,  and 
therefore  he  can  afford  to  neglect  his. 

I  affirm  that  a  sense  of  duty  is  fairly  keeping  pace  in 
its  development  with  the  growth  of  the  country  and  with 
the  demands  of  our  citizenship.  Let  us  consider  some  of 
the  evidence. 

There  is  a  natural,  a  necessary,  a  mutually  creative 
relation  between  the  development  of  life  insurance  in  the 
United  States  and  the  peculiar  character  of  the  citizenship 
of  the  United  States;  each  explains  the  other.  American 
citizenship  was  the  virgin  soil;  the  life  insurance  idea  was 
the  vivifying,  fructifying  sun.  The  product,  American  life 
insurance,  towers  above  other  beneficent  and  business  struc- 
tures as  the  sequoias  of  California  tower  above  the  great 


318  Militant  Life  Insurance 

pines  which  surround  them.  In  its  result  it  surpasses  other 
plans  because  it  has  reached  in  the  individual  what  other 
plans  have  not  reached,  because  it  alone  has  cultivated  and 
satisfied  that  sense  of  personal  obligation  to  general  society 
which  rests  upon  every  member  of  every  American  com- 
munity. Whatever  else  they  may  do,  whatever  else  they 
may  be,  our  great  life  companies  are  conclusive  proof  that 
a  keen  sense  of  civic  duty  pervades  the  entire  people. 

Consider  some  of  the  facts  which  distinguish  our  citi- 
zenship from  the  citizenship  of  any  other  land:  Here  no 
man  may  be  troubled  because  of  his  religious  convictions. 
Do  you  realize  that  this  is  true  in  no  other  important  coun- 
try on  earth?  It  has  not  been  true  here  very  long,  but  it  is 
true  now.  The  certain  knowledge  that  we  may  not  be 
harassed  or  oppressed  over  what  we  believe  or  do  not 
believe  about  any  of  the  great  so-called  fundamentals  of 
religious  faith  makes  us  all  stand  a  little  straighter.  It 
cost  much  to  accomplish  that.  But  church  and  state  are 
forever  separated  here,  really  separated.  That  is  not  true 
of  any  other  considerable  nation.  Such  a  condition  seems 
perfectly  natural  to  us,  but  it  was  not  so  natural  to  our 
forefathers.  Only  yesterday,  or  at  most  a  few  generations 
ago,  they  were  hanging  Quakers  and  jailing  Baptists. 

American  life  insurance  could  never  have  attained  its 
gigantic  proportions  except  for  the  complete  separation  of 
church  and  state,  except  for  the  regeneration  of  society 
which  that  condition  has  brought  about.  It  could  never 
have  become  what  it  is  while  some  overlord  was  respon- 
sible for  men's  convictions,— so  long  as  men  did  not 
directly  and  individually  grapple  with  all  the  problems 
of  life  and  of  death,  too.  It  could  never  have  become 
what  it  is  unless  the  souls  of  men  had  been  awake,  or 
unless  it  had  been  able  to  awaken  them.  With  civil 
and  religious  liberty  came  the  demand  for  a  new  man, 
or,  perhaps  it  would  be  better  to  say,  came  the  opportunity 


Life  Insurance  and  the  Man  319 

for  a  new  man.  The  calamity  unspeakable  would  have 
been  the  failure  of  the  new  man  to  appear  under  the  inspi- 
ration of  such  conditions.  If  selfishness  and  not  responsi- 
bility, if  license  and  not  liberty  had  taken  control,  our  last 
condition  would  have  been  worse  than  our  first.  All  that 
might  have  happened.  Many  prophesied  that  it  would 
happen.  Some  critics  claim  that  it  has  happened;  but  we 
know  better.  We  know  that  more  and  more  our  people 
love  justice  and  fair  play,  more  and  more  they  hate  graft 
and  special  privilege,  more  and  more  they  value  the  right 
of  franchise.  Steadily  they  are  rising  to  the  high  demands 
which  government  by  the  people  makes  upon  its  citizen- 
ship. But  this  condition  has  not  come  in  a  moment.  It 
existed  only  imperfectly  when  the  Constitution  was 
adopted.  Its  germ  was  there,  and  it  is  flowering  now 
largely  because  it  has  been  watered  by  men  of  ideals  and 
cultivated  by  institutions  which  have  led  the  people  wisely. 
This  is  history  repeating  itself.  The  world  half  uncon- 
sciously becomes  ready  for  a  great  forward  step,  but  in 
order  to  take  that  step  it  must  have  the  leadership  of  a 
man  or  of  an  idea.  Sometimes  that  leadership  appears  in 
the  Monk  who  nails  his  theses  to  a  cathedral  door  with 
hammer  strokes  which  echo  back  from  a  continent;  again 
it  appears  in  the  fanatic  who,  violating  the  text  of  the 
written  law,  rushes  straight  to  certain  death  at  Harper's 
Ferry,  and  shocks  public  opinion  into  crystalline  form. 
Some  great  forward  steps  are  taken  gently  and  gradually 
without  invoking  the  terror  of  battle-fields  or  the  bitterness 
of  theological  discussion.  The  development  of  our  citizen- 
ship under  the  spur  of  the  life  insurance  idea,  was  such 
a  step. 

About  two  and  a  half  generations  ago,  when  as  a  Nation 
we  had  passed  beyond  our  period  of  organization,  had 
purchased  Louisiana,  fought  the  War  of  1812,  acquired 
the  Oregon  country,  Texas,  and  the  territory  which  includes 


320  Militant  Life  Insurance 

California,  we  were  ready  for  our  real  advance.  Just  then 
life  insurance  began  its  active  propagandism.  As  a  clean- 
cut  fact,  what  was  its  plea?  It  went  to  a  man  personally 
and  said  to  him,  first  of  all,  "You  are  a  man;  you  are 
valuable  because  you  have  responsibilities,  high  responsi- 
bilities to  your  family,  to  yourself  and  to  the  state.  You 
cannot  avoid  those  responsibilities  and  be  a  good  citizen. 
No  one  else  can  discharge  your  duties  for  you.  You  can 
discharge  them  and  you  must".  It  appealed  to  manhood. 
Its  voice  cut  through  the  fogs  of  prejudice,  the  clouds  of 
superstition,  and  the  mysteries  always  assiduously  culti- 
vated by  every  type  of  ruler.  It  was  many-voiced  and 
many-tongued.  It  sent  out  thousands  of  missionaries 
preaching  the  new  gospel.  These  preachers  could  not  talk 
to  their  text,  they  could  not  succeed,  if  they  wandered 
from  the  doctrine  of  man's  individual  responsibility.  They 
preached  no  hatred  of  other  men;  they  held  up  no  terror 
of  authority;  they  offered  no  menace;  they  appealed  to  no 
impulse  of  greed.  They  didn't  talk  systems  of  government 
or  religion.  They  struck  straight  for  the  greatest  thing  in 
the  world— a  man's  self-respect.  They  reached  it,  and 
when  we  understand  that  fact,  wonder  ceases  over  their 
mighty  success.  When  they  reached  self-respect  they  quick- 
ened the  man.  When  there  was  in  the  man  only  a  spark, 
they  fanned  the  spark  into  a  flame.  When  that  flame  burst 
forth  the  man  was  transformed.  Away  went  inherited 
fears,  away  went  the  hesitancy  and  lack  of  decision  and 
weakness  born  of  dead  generations  and  dying  systems. 
Forth  stepped  not  merely  an  insurant,  but  a  man  of  a  new 
type— armed  as  no  other  citizen  of  any  other  country  was 
ever  armed. 

What  other  business  or  profession  has  for  three-quarters 
of  a  century  driven  home,  singly,  an  idea  so  vital  to  the 
sound  development  of  the  nation?  Other  forces  have 
worked,  it  is  true,  but  none  so  uniquely,  and  none  has  stuck 


Life  Insurance  and  the  Man  321 

so  close  to  the  real  point.  Religion  worked  mightily,  but 
coupled  with  its  exhortations  were  necessarily  the  demands 
of  that  authority  which  is  inseparable  from  every  form  of 
dogmatic  theology.  Politics  worked,  but  generally  for  an 
appropriation  first.  Life  insurance  alone  called  directly  to 
the  man,  to  that  divine  something  in  him  which  has  been 
struggling  upward  for  thousands  of  years.  Every  policy 
placed  made  a  better  citizen;  every  premium  paid  was  a 
guarantee  of  the  perpetuity  of  the  Constitution. 

Now  all  the  world  begins  to  see  the  power  and  the 
prophecy  which  inhere  in  the  citizenship  of  the  United 
States.  There  was  never  a  citizenship  like  it.  That  is  a 
matter  of  history,  a  matter  of  fact.  We  believe  that  it  is 
fairly  conscious  of  its  might,  that  it  is  fearless  and  yet 
fair.  We  know  that  it  responds  ultimately  to  every  worthy 
appeal.  We  know  that  it  is  grim  in  its  hatred  of  oppression. 
We  are  certain  that  in  the  end  it  will— as  it  always  has— 
cast  out  false  leaders. 

If  you  analyze  this  citizenship  seeking  to  know  its 
dynamics,  seeking  to  understand  why  it  hates  oppression 
and  wants  the  square  deal,  why,  largely  from  a  moral  im- 
pulse, it  once  sent  a  million  men  into  battle,  why  it  lately 
won  freedom  for  a  fair  island  and  then  renounced  dominion 
over  it,  if  you  pull  it  to  pieces  to  learn  in  what  consists 
that  moral  and  spiritual  power  which  still  makes  the  United 
States  the  land  of  hope  for  the  plain  people  of  all  lands,— 
if  you  do  this,  you  come  in  the  last  analysis  to  individual 
self-respect,  the  nerve  centre  of  civil  and  religious  liberty. 
At  the  same  time  you  find  yourself  at  the  very  sources  of 
life  insurance;  you  have  reached  its  origin  and  you  under- 
stand its  gospel. 

Life  insurance  did  not  create  the  conditions  which  ex- 
isted here  seventy-five  years  ago.  It  had  little  part  in  that 
old-world  struggle  which  is  still  going  on  for  the  rights  of 
the  individual.  It  had  no  part  in  the  struggle  which  went 


322  Militant  Life  Insurance 

on  here  for  two  hundred  years.  Its  time  had  not  come,  but 
its  time  came.  Seventy-five  years  give  us  a  perspective. 
Events  array  themselves  in  order.  Results  can  be  traced 
to  causes.  The  great  fact  begins  to  loom  up  that  at  a  criti- 
cal period,  when  great  issues  were  at  stake,  life  insurance 
began  a  propagandism  which  was  as  closely  related  to  the 
salvation  of  free  government  as  the  doctrine  of  the  atone- 
ment is  to  the  salvation  of  men  under  the  dogma  of  origi- 
nal sin. 

American  life  insurance  has  fostered  and  encouraged 
the  religion  of  self-respect.  It  has  been  militant  in  its 
methods.  It  has  been  as  fierce  as  the  Crusaders  in  its 
attacks.  In  its  ministrations  to  the  needs  of  the  weak  and 
the  defenceless  it  has  been  as  gentle  and  as  blessed  as  the 
dews  of  heaven.  Its  creed,  your  creed,  was  phrased  by 
Emerson,  who  was  a  prophet,  in  these  words : 

"We  will  work  with  our  own  hands, 
we  will  walk  on  our  own  feet, 
we  will  speak  our  own  minds." 

When  the  upright  man,  standing  upright,  was  needed,  we 
called  to  him,  called  on  his  soul  and  all  that  was  within 
him,  and  he  responded,  "Here  am  I."  In  this  respect 
the  work  of  life  insurance  is  unique.  This  is  the  finest 
thing  it  does. 


LIFE  INSURANCE 
THE  DISCOVERER  AND  THE  LAWGIVER 


AN  ADDRESS  TO  THE  INSPECTORS,  AGENCY  DIRECTORS  AND  LEADING  FIELDMKN 

OF  THE  NEW- YORK  LIFE  INSURANCE  COMPANY,  HOTEL  BON  AIB, 

AUGUSTA,  GA.,  JANUARY  19,  1911 


greatest  discovery  made  since  man 
began  to  hunt  for  truth  is  man's  discov- 
ery of  himself.  The  greatest  organized 
institution,  helping  to  expand  and  ex- 
tend that  discovery  and  to  establish  it 
as  a  practical  fact,  is  life  insurance.  A 
famous  novelist  once  wrote  a  book 
around  the  idea  of  how  not  to  do  it. 
One  of  the  puzzles  in  history — when  it 
is  reviewed  in  a  large  way — is  how  it  happened  that  man 
was  so  long  in  beginning  to  discover  himself.  He  looked 
for  relief  everywhere  but  in  the  right  place.  He  could 
understand  no  help  that  was  not  external  and  mysterious. 
If  he  was  ill,  he  wanted  a  miracle  performed;  if  he  was 
hungry,  he  tried  to  steal  his  food  from  somebody  else ; 
if  he  was  numerically  weak,  he  bowed  the  knee  and  bent 
his  neck  under  the  dominance  of  some  body  or  some  thing 
which  he  thought  could  bring  him  protection  and  safety. 

323 


324  Militant  Life  Insurance 

He  was  especially  afraid  of  death,  because  life  had  no 
meaning.  So  all  kinds  of  institutions  grew  up,  mostly 
based  on  the  doctrine  that  man  himself  here  and  now  was 
a  worm  of  the  dust,  full  of  iniquity  and  of  no  account ;  pos- 
sessing the  possibilities  of  great  things,  good  and  ill,  in 
an  indefinite  new  world,  if  only  he  would  act  on  the 
theory  that  he  was  of  no  consequence  here  and  accept  the 
doctrine  that  somebody  else  possessed  all  the  secrets  of 
this  life  and  of  the  life  to  come.  He  was  everlastingly 
looking  for  external  authority. 

He  was  a  member  of  a  clan — of  a  tribe — and  the  clan 
or  the  tribe  was  everything  and  the  man  was  nothing.  A 
member  of  any  other  clan  or  tribe  was  presumptively  an 
enemy — to  be  overcome,  slaughtered  or  incorporated  into 
his  own  tribe.  In  what  we  call  the  civilized  world  this 
went  on  until  one  tribe  ruled  the  world,  and  then  they 
deified  one  man  who  set  his  foot  on  the  neck  of  the  whole 
human  race.  Because  they  were  looking  in  the  wrong 
direction  for  help,  they  used  all  the  forces  of  life  to  up- 
hold the  authority  of  the  worst  of  men  until — when  the 
abuse  could  go  no  farther  because  the  pyramid  was  in- 
verted— it  toppled  over  and  the  Roman  Empire  went  to 
pieces.  If  you  want  to  learn  the  extremes  to  which  this 
doctrine  carried  men,  to  see  what  sort  of  men  honest  men 
made  gods  of,  read  Suetonius*  Lives  of  the  Caesars.  We 
see  now  that  what  was  valuable  in  that  Empire  was  not 
the  Roman  legion  but  the  Roman  law — not  what  was  de- 
veloped from  without  but  what  was  in  man  himself  and 
found  expression  in  the  law. 

After  the  Roman  Empire  fell  to  pieces,  man  began  to 
develop  the  idea  of  nationality.  It  was  just  a  small, 
hesitating  step  in  the  right  direction,  and  it  took  a  long 
time  fully  to  establish  it.  Meanwhile  man  was  groping 
in  the  twilight,  and  the  old  habits  were  still  strong  upon 
him.  He  was  hunting  the  Holy  Grail,  or  fighting  for  the 


Life  Insurance— the  Discoverer  and  the  Lawgiver  325 

possession  of  an  empty  sepulchre,  performing  almost  in- 
conceivable deeds  of  heroism  and  of  sacrifice,  in  order  to 
find  the  thing  which  all  the  while  lay  within  himself.  He 
created  the  fiction  of  the  divine  right  of  kings  and 
slaughtered  millions  of  his  fellows  in  support  of  that  fic- 
tion, when  as  a  matter  of  fact  the  only  rights  that  had  any 
existence  were  his  own  rights.  He  developed  a  multiplic- 
ity of  faiths  and  in  their  names  he  waged  the  cruellest 
and  most  hideous  wars  of  all  time,  seeking  not  to  establish 
his  own  divinity  but  to  establish  the  divinity  of  some- 
thing exterior  to  himself. 

Nationalities  grew  up  and  then  proceeded  to  fight  each 
other.  The  rights  of  the  individual  were  again  lost  sight 
of.  The  Nation,  under  the  fetish  of  patriotism,  became 
once  more  the  external  something  in  which  man  sought 
salvation.  Governmentally  that  is  the  condition  which 
exists  to-day.  The  world  from  this  point  of  view  is  little 
better  than  an  armed  camp.  About  the  only  consolation 
to  be  derived  from  that  aspect  is  the  fact  that  this  pro- 
gram, like  all  the  earlier  programs,  is  running  to  an  ex- 
treme where  it  will  necessarily  break  down.  The  people 
can  only  pay  about  so  much  in  taxes.  There  is  a  limit  to 
the  standing  armies  they  can  support.  There  is  a  limit 
to  the  battle-ships  they  can  build.  There  is  a  limit  to  the 
amount  of  vital  energy  that  can  be  drawn  from  the  great 
productive  interests  of  life  to  rot  on  the  water  and  de- 
generate in  military  camps. 

All  these  things  have  arisen  from  the  fact  that  man 
has  not  been  looking  in  the  right  place  for  relief.  It  is 
possibly,  even  probably,  true  that  until  relatively  recent 
times  he  had  not  developed  to  the  point  where  he  could 
take  any  other  view.  It  is  equally  and  undeniably  true 
that  ambition  and  the  love  of  power  created  leaders  who 
deliberately  developed  the  wrong  point  of  view  and  kept 
men  from  looking  in  the  right  direction,  kept  them  from 


326  Militant  Life  Insurance 

making  the  great  discovery, — that  the  greatest  thing  in 
the  world  is  man  himself ;  that  the  most  valuable  thing  in 
the  world  is  man  himself;  that  the  most  powerful  thing 
in  the  world  is  man  himself;  that  the  divine  thing  which 
gives  the  world  and  the  universe  a  meaning  is  again  man 
himself. 

Man's  discovery  of  man  is  the  greatest  thing  that  ever 
happened ;  but  no  great  part  of  the  world  yet  knows  that 
such  a  discovery  has  been  made  or  what  the  discovery 
means.  Columbus  discovered  America  in  1492.  Few 
people  realize  that  for  four  hundred  years  before  he  dis- 
covered America  there  were  people  enough  in  Greenland 
so  that  the  Catholic  Church  had  a  bishop  there  and  natur- 
ally churches  of  some  importance,  and  that  these  people 
were  more  or  less  in  communication  with  the  continent  of 
North  America.  The  first  discovery  made  no  impression. 
The  discovery  of  America  by  Columbus  made  no  im- 
pression for  more  than  a  century.  It  was  nearly  one 
hundred  and  thirty  years  after  Columbus  sailed  before  a 
successful  colony  was  planted  in  Virginia  and  before  the 
Pilgrims  landed  at  Plymouth.  Europe  was  too  busy  fight- 
ing to  uphold  this  government  or  that  religion.  Centuries 
after  Columbus  landed  at  San  Salvador  prizes  were  of- 
fered in  Europe  for  the  best  essay  showing  of  what  benefit 
to  the  world  the  discovery  of  America  had  been.  The 
man  who  won  the  prize  declared  that  the  discovery  of 
quinine  was  the  only  thing  that  had  been  of  importance. 
In  other  words,  the  Old  World  had  not  the  faintest  con- 
ception of  what  the  discovery  of  America  meant.  It  is 
probably  no  exaggeration  to  say  that  even  the  men  who 
drafted  the  Constitution  in  1787  had  little  conception  of 
what  America  meant  or  what  their  immortal  document 
would  do. 

The  discovery  of  the  law  of  life  insurance  was  not  the 
only  thing  that  made  man  discover  himself,  but  it  is  one 


Life  Insurance— the  Discoverer  and  the  Lawgiver  327 

of  the  greatest  things,  and  the  practical  application  of  the 
law  is  the  greatest  force  in  bringing  man  to  understand 
himself  and  his  own  supreme  importance. 

The  discovery  of  the  law  of  life  insurance  was  consid- 
ered of  small  account  at  the  time.  Dr.  Halley  published 
the  Breslau  Table  of  Mortality  in  1693,  and  it  was  buried 
in  the  collections  of  the  Royal  Society  of  London  for 
nearly  eighty  years  and  was  itself  rediscovered  in  1761 
by  the  founders  of  the  Equitable  Society  for  the  Assurance 
of  Life  and  Survivorship.  Meanwhile  governments — those 
divinely  ordained  protectors  of  mankind — some  before 
and  some  after  Halley 's  discovery — were  forbidding  in- 
surance upon  the  lives  of  men;  while  even  down  to  our 
own  day  theologians  have  denounced  it  as  betraying  a 
lack  of  faith  in  the  goodness  of  God.  One  highly  moral 
sect  of  American  Christians — the  Dunkards — still  excom- 
municates the  member  who  insures  his  life.  On  the  other 
hand,  it  is  but  fair  to  say  that  the  discovery  was  first 
utilized  by  the  government  of  Holland  in  fixing  the  value 
of  annuities,  while  in  this  country  the  Presbyterian 
Synods  of  New  York  and  Pennsylvania  established  the 
first  successful  American  life  insurance  company. 

When  men  discovered  that  there  was  a  law  of  death 
they  inevitably  discovered  the  law  of  life.  This  was  a 
real  revelation.  Every  sound  law  is,  when  discovered,  a 
revelation— if  there  is  a  general  intelligence  to  comprehend 
it  and  a  conscience  to  use  it.  The  law  of  life  insurance 
helped  man  to  discover  himself  because  it  taught  him  that, 
through  it,  he  could  not  only  banish  the  terrors  of  life's 
uncertainty,  but  by  its  principle  of  co-operation  he  could 
of  himself  and  by  himself  create  a  power  that  could  do 
without  waste  what  governments  taxed  him  unmercifully 
to  do  and  then  failed  to  do.  It  suggested  a  new  patriotism, 
because  it  taught  him  that  there  was  no  reason  why  he 
should  slaughter  his  fellows  in  order  to  make  his  home 


328  Militant  Life  Insurance 

safe.  Governments  are  necessary,  but  not  necessary  when 
they  call  for  such  fearful  sacrifice.  Governments  and 
other  institutions  have  approached  the  problem  from  the 
wrong  point.  They  have  assumed  that  man  existed  in 
order  to  establish  them,  in  some  way  or  other,  as  divinely 
appointed.  Man  is  learning  that  all  institutions  should 
exist  for  the  benefit  of  man,  and  for  any  other  reason  than 
that  they  have  no  cause  for  existence  whatever. 

One  does  not  need  to  look  farther  back  than  the 
present  moment  to  understand  how  little  man  appreciates 
himself  and  how  slightly  he  understands  the  significance 
of  certain  great  laws. 

To  change  the  figure  of  speech — what  have  we  done? 
We  have  sailed  in  a  new  Mayflower.  We  have  landed 
in  a  new  world,  and  created  a  few  struggling  colonies, 
but  we  have  no  adequate  conception  of  what  human  life 
means  and  what  human  life  can  do  when  it  knows  itself 
and  understands  its  power  and  its  divinity;  little  more 
conception  than  the  Pilgrim  Fathers  or  the  leaders  of 
Massachusetts  Bay  and  Salem  had  of  what  man  would  do 
in  matters  of  government  and  human  freedom  in  the 
Western  Continent.  But  we  have  done  something.  We 
have  sailed  away  from  the  land  of  false  doctrine,  of  war, 
of  institutions  which  can  last  only  as  long  as  men  fight 
each  other.  We  have  landed  in  a  country  where  we  have 
discovered  and  established  the  law  of  co-operation  and 
have  adopted  a  constitution  under  which  every  vigorous 
life  in  facing  its  obligations  defies  the  demoralizing  men- 
ace of  mortality.  We  have  penetrated  through  nationality 
and  all  the  other  institutions  which  have  kept  man  from 
discovering  himself.  We  have  brought  man  face  to  face 
with  himself.  We  did  not  first  shatter  the  fiction  that 
some  external  power  could  bring  man  relief ;  we  developed 
his  self-respect,  showed  him  what  he  could  do  and  how  he 
could  do  it,  and  then  the  fiction  fell  apart  of  itself. 


Life  Insurance— the  Discoverer  and  the  Lawgiver  329 

We  are  making  new  discoveries — discovering  new  laws 
every  year,  and  proclaiming  new  laws  every  year. 

A  great  statesman  and  citizen  of  our  country  not  long 
since,  in  discussing  problems  of  currency  and  finance  be- 
fore an  audience  of  bankers,  said  that  the  country  ought 
to  have  a  currency  and  banking  system  under  which  every 
man  could,  as  he  needed,  tap  the  reservoir  of  the  entire 
public  credit  to  the  extent  of  his  individual  credit.  This 
seemed  to  bankers  a  beautiful  theory,  very  desirable,  but 
practically  unattainable.  But  in  life  insurance  it  is  a 
theory  absolutely  established  and  efficient.  Every  policy- 
holder  in  the  present  day  company  holding  a  level- 
premium  contract,  in  addition  to  his  indemnity  and  all  the 
other  benefits  of  his  insurance,  can  at  any  time  draw  on 
the  resources  of  combined  millions  of  men  and  do  it  with 
absolute  certainty  at  any  moment,  in  good  times  or  bad 
times,  to  the  extent  of  his  individual  credit. 

Life  insurance  is  not  only  a  discoverer,  but  a  lawgiver. 
It  is  always  a  teacher  of  law.  It  is  governed  by  law  in  its 
every  act.  It  does  not  indulge  in  mysteries.  It  does  not 
believe  in  caprice  or  chance.  Its  whole  program  is  whole- 
some, clear-eyed,  clean-minded.  In  this  respect,  too,  it  has 
been  one  of  the  most  powerful  factors  in  helping  man  to 
discover  himself.  Man  was  tanght  for  many  thousands  of 
years  that  the  moral  law  came  to  him  from  the  outside, 
that  it  came  down  mysteriously  in  various  ways  until  it 
finally  was  written  in  tables  of  stone  on  the  top  of  Mt. 
Sinai.  A  great  part  of  the  intelligent  world  now  takes 
that  story — beautiful  as  it  is  and  powerful  as  it  has  been 
— for  what  it  is  worth.  But  they  know  that  the  moral  law 
rests  in  a  man's  own  consciousness;  that  it  is  born  within, 
and  if  it  is  to  be  effective  it  must  be  applied  within ;  that 
it  did  not  come  from  without,  and  when  applied  from 
without  it  is  productive  of  cruelty  and  hypocrisy. 

Perhaps  the  most  striking  peculiarity  of  the  law  of 


330  Militant  Life  Insurance 

mortality  is  the  fact  that  it  reveals  nothing  concerning 
the  individual  when  alone.  It  cannot  be  selfishly  applied. 
Men  had  always  been  seeking  some  hint  or  prophecy  of 
how  long  they  would  live — how  long  the  individual  would 
live.  They  studied  the  stars  above;  they  called  spirits 
from  the  vasty  deep.  The  answers  that  came  from  with- 
out invariably  brought  degradation  and  reaction.  The 
correct  answer  finally  came  from  within — from  man  him- 
self. The  form  in  which  it  came  indicated  the  use  that 
could  be  made  of  it — it  must  be  used  co-operatively,  un- 
selfishly. It  established  a  new  bond  of  kinship.  Here 
was  a  physical  law  of  which  every  man  was  seen  to 
be  a  part,  a  law  that  called  for  neither  King  nor  Bishop. 
It  gave  a  new  meaning  to  the  declaration  that  no  man 
liveth  to  himself  and  no  man  dieth  to  himself.  If  there  is 
to  be  co-operation  there  must  be  peace,  fairness,  confi- 
dence, kindness,  justice,  responsibility,  faith,  efficiency, 
and  the  law  which  underlies  each  of  these  great  rules  of 
conduct  life  insurance  teaches  constantly. 

As  soon  as  the  law  of  mortality  was  applied  by  life 
insurance  it  became  a  discoverer  in  the  moral  realm  also — 
a  discoverer  "of  the  thoughts  and  intents  of  the  heart " 
— the  very  work  which  the  Apostle  attributes  to  the  word 
of  God.  Life  insurance  discovers  the  man  who  needs  it 
and  makes  its  appeal,  not  to  any  outward  authority,  but 
to  the  moral  law  written  in  the  heart.  It  thus  becomes 
the  moral  lawgiver.  It  says  "you  ought".  There  is  no 
voice  of  authority  higher  than  that.  "Am  I  my  brother's 
keeper?"  Not  in  the  sense  that  I  must  impose  my  belief 
and  practice  upon  him  and  persecute  him  if  he  does  not 
agree  with  me.  Am  I  the  keeper  of  those  whose  support 
I  have  undertaken?  Most  assuredly — to  the  utmost  ex- 
tent of  my  ability.  That  is  the  answer  of  every  manly 
man — of  every  honest  heart.  But  before  the  discovery  of 
the  law  of  mortality  and  its  application  by  life  insurance, 


Life  Insurance— the  Discoverer  and  the  Lawgiver  331 

a  man's  power  to  support  his  family  was  limited  by  the 
length  of  his  life.  If  life  was  prematurely  cut  off,  we 
placed  the  blame  for  failure  to  support  the  family  upon 
Providence  or  fate.  Life  insurance  has  brought  the  re- 
sponsibility back  to  the  man 's  own  door.  He  can,  therefore 
he  ought.  Since  life  insurance  has  become  the  moral  law- 
giver, Providence  has  become  less  inscrutable;  fate  has  be- 
come more  kindly. 

But  even  in  the  application  of  the  law  of  mortality 
through  life  insurance  men  were  hampered  by  old  habits 
of  thought,  the  old  ways  of  looking  at  things.  We  made  a 
fetish  of  what  we  called  standard  lives.  We  carried  the 
Presbyterian  doctrine  of  election  into  life  insurance;  those 
who  were— by  arbitrary  rules— within  the  charmed  circle, 
were  the  elect,  for  whom  were  reserved  all  the  benefits  of 
life  insurance,  while  the  rest  were  consigned  to  outer  dark- 
ness. It  is  only  in  recent  years  that  we  have  discovered 
that  there  is  a  law  of  life,  of  hope,  of  salvation,  not  for  the 
elect  alone,  but  for  the  multitude.  And  here  again,  history 
has  repeated  itself,  for  in  the  extension  of  the  benefits  of 
life  insurance  to  so-called  impaired  lives  we  have  been  ham- 
pered by  the  external  force  of  government.  But  still  the 
work  goes  on  because  the  law  of  life  insurance  is  more 
elastic  than  the  law  of  the  land,  and  if  it  cannot  be  applied 
in  one  way  it  can  in  another.  In  discharging  its  function 
as  a  lawgiver  life  insurance  has  not  forgotten  its  function 
as  a  discoverer. 

Civil  laws  are  as  various  as  nationalities.  Life  insurance 
laws  are  the  same  everywhere.  Civil  laws  halt  at  the  fron- 
tier. Beyond  that  there  is  the  fiction  called  international 
law.  International  law  in  its  last  analysis  is  still  based  on 
the  doctrine  that  might  is  always  right.  To  bring  its  chil- 
dren into  harmony  from  world's  end  to  world's  end  life  in- 
surance needs  no  courts  of  arbitration,  no  Hague  Tribunals. 
And  why?  Because  it  has  discovered  that  men  are  essen- 


332  Militant  Life  Insurance 

tially  the  same  everywhere;  because  it  has  discovered  that 
international  hatreds  are  the  product  of  false  theories;  be- 
cause naturally  and  not  by  grace,  men  trust  each  other. 
Having  made  these  discoveries,  it  became  the  lawgiver,  civil 
and  moral. 

Its  first  law  is  co-operation,  its  second  law  is  justice,  its 
third  law  is  self-respect,  and  then  comes  in  the  law  of  ' '  you 
ought "  following  hard  on  the  heels  of  "you  can".  This 
lifts  man's  eyes  to  the  contemplation  of  his  own  majesty, 
his  own  responsibility,  his  own  power. 

By  its  discoveries  and  by  its  laws  life  insurance  changes 
man  from  the  creature  to  the  master,  from  a  means  to  an 
end,  from  a  mob  to  a  solid  phalanx.  It  banishes  the  other- 
wise constant  and  demoralizing  fear  of  death  and  sets 
men  to  living 

"As  if  this  flesh  which  walls  our  life  about  were 
brass  impregnable."— Richard  u. 


LIFE  INSURANCE 
AND  COMMERCIAL  BANKING: 

A  PARALLEL  AND  A  CONTRAST 


DELIVERED  BEFORE  THE  FINANCE  FOBUM,  WEST  SIDE  Y.   M.   O.  A.   NEW  YORK. 

APBIL  19,  1911 


IFE  INSURANCE  and  banking  are  not 
usually  considered  as  being  alike  or  even 
similar.  In  fact  they  are  fundamentally 
much  alike,  while  differing  in  details  and 
reaching  widely-separated  fields.  They 
deal  with  differing  phases  of  human 
needs,  but  both  deal  primarily  with  the 
same  thing,  namely,  credit. 

Each  is  evidence  of  a  high  state  of 
civilization.  Neither  has  ever  flourished  except  where  men 
believe  in  the  fidelity  and  justness  of  their  fellows.  In 
Great  Britain  banking  plays  the  largest  part  it  has  ever 
played  upon  the  world's  stage.  In  the  United  States  life 
insurance  is  represented  by  larger  companies  and  presents 
larger  totals  than  in  any  other  country.  Both  are  based 
on  real  values  expanded  into  prodigious  totals  by  the  use 
of  credit. 


333 


334  Militant  Life  Insurance 

Banking  deals  with  the  products  of  labor,  with  created 
wealth,  represented  through  accepted  standards  of  value 
and  built  into  a  commercial  structure  so  wisely  and  so 
strongly  that  a  dollar  thus  combined  with  many  others 
does  the  work  of  many  dollars  acting  separately. 

Life  insurance  deals  with  a  thing  much  more  valuable 
than  created  wealth ;  it  deals  with  the  individual  man,  who 
produces  all  wealth,  without  whom  wealth  would  have 
neither  existence  nor  meaning. 

Banking  makes  a  dollar  do  the  work  of  many  dollars. 
Life  insurance  takes  the  individual  life,  which  by  itself  has 
little  more  power  or  usefulness  than  a  hoarded  dollar,  and 
by  linking  it  with  other  individual  lives  under  a  fair  and 
definite  contract,  not  only  increases  its  power  many  fold, 
but  transforms  it  into  a  moral  and  industrial  force  powerful 
beyond  calculation. 

The  individual  standing  by  himself  as  a  social  being 
needs  credit,  in  order  to  perform  his  proper  part  in  the 
social  program.  He  may  also  need  credit  at  the  bank, 
credit  as  against  what  he  owns,  but  he  always  needs  credit 
facing  the  obligations  of  life,  and  the  coming  of  that 
mystery  which  we  call  death.  Standing  by  himself,  liable 
to  die  to-morrow  and  just  as  liable  to  live  to  old  age,  man 
is  very  like  coin-money.  Coin-money  is  the  only  real 
money.  The  individual  is  the  only  real  wealth. 

But  the  business  of  the  world  cannot  be  done  by  using 
coin-money  alone,  and  the  individual,  menaced  by  the  un- 
certain duration  of  life,  cannot  discharge  his  social  obliga- 
tions without  the  aid  of  some  device  which  will  capitalize 
his  future  earning  power. 

It  was  a  great  achievement— after  a  man  had  a  hard- 
earned  dollar  in  hand— for  him  to  deposit  that  dollar  with 
some  one  else  and  put  it  to  work  for  other  men,  at  some 
risk,  as  well  as  with  some  decided  advantages  to  himself. 
This  was  the  basis  of  commercial  banking.  It  was  a  greater 


Life  Insurance  and  Commercial  Banking          335 

achievement  to  get  the  individual  to  use  another  dollar  as  a 
means  of  securing  another  sort  of  credit,  representing  what 
he  could  produce  if  he  lived,  but  could  not  provide  if  he 
prematurely  died.  This  was  the  basis  of  the  great  structure 
we  call  life  insurance. 

The  distance  backward  from  our  existing  systems  of 
banking  and  commerce  to  that  point  where  business  was 
limited  to  barter,  or  even  to  a  time  when  it  was  limited 
to  an  actual  exchange  for  coin-money,  is  so  great  that 
when  we  consider  it  we  realize  not  only  how  great  the 
advance  is,  but  how  great  the  service  is  which  banking  has 
rendered. 

The  distance  backward— measured  in  years— from 
modern  life  insurance  to  the  days  when  the  individual 
faced  his  obligations  in  life  with  no  sure  resource  against 
what  men  call  fate,  is  not  far,  but  sociologically  it  marks  a 
greater  advance  than  do  the  developments  of  banking. 

The  various  services  performed  by  commercial  banking, 
through  loans  and  discounts  and  purchases  of  commercial 
paper  are  all  kindred  and  the  purchase  of  commercial 
paper  may  be  used  as  a  comprehensive  illustration  of  that 
service.  Individuals,  partnerships  and  corporations  go  to 
the  bank  and  say,  "Here  is  our  promise  to  pay  $50,000  in 
six  months.  We  want  the  money  now.  What  will  it  cost 
us,  what  must  we  pay  in  order  to  get  the  money  or  credit 
immediately?"  However  good  the  sellers'  credit  may  be, 
they  must  pay  a  certain  rate  if  they  dispose  of  their  paper — 
more  or  less  according  to  their  rating — but  they  must  pay. 

In  life  insurance  the  individual  goes  to  that  modern 
institution  called  the  life  insurance  company,  and  says, 
"My  obligations  to  my  family  and  to  society,  so  far  as 
mere  property  or  money  can  express  them,  amount  to 
$50,000.  If  I  live,  I  can  meet  them;  but  I  may  not  live. 
If  I  die,  my  obligations  will  be  protested.  What  will  you 
charge  me  now  and  each  year  hereafter  and  guarantee  the 


336  Militant  Life  Insurance 

payment  of  that  $50,000  if  my  obligations  should  mature 
through  my  premature  death  or  at  a  specified  time?" 

The  contract  is  issued  at  2  or  3  or  4  or  5  or  even  a 
higher  per  cent.,  according  as  age  or  health  or  questions  of 
morals  or  plan  desired  increases  or  decreases  his  rating 
and  the  necessary  cost.  He  pays  about  the  same  per  cent, 
for  this  contract  (unless  it  contains  endowment  provisions) 
that  he  does  to  get  his  paper  discounted.  If  young  and 
sound  physically  and  morally,  he  pays  less. 

A  man  buys  an  addition  to  his  bank  account  when  he 
''sells"  his  obligation :  he  buys  an  addition  to  his  social  re- 
sources when  he  secures  a  life  insurance  contract.  The  two 
transactions  are  almost  identical  in  principle.  From  this 
point  on,  however,  commercial  banking  and  life  insurance 
diverge.  The  differences  are  striking.  The  money  used 
in  banking  must  be  liquid,  because  the  dollar  deposited  in 
ordinary  banking  is  subject  to  check  at  all  times,  and  has  to 
do  much  work,  has  in  effect  to  be  in  many  different  places 
at  the  same  time.  When  a  man  gets  credit  against  the 
contingency  of  death,  and  does  it  with  enough  of  his  fellows 
to  make  an  average,  the  money  held  to  meet  those  credits 
at  maturity  differs  from  the  money  used  in  banking  in 
that  it  does  not  need  to  be  liquid.  The  insurance  reserve, 
at  an  assumed  rate  of  interest,  is  readily  ascertainable, 
mathematically  exact,  and  usually  fixed  by  law.  The  bank- 
ing reserve  is  more  or  less  a  guess,  is  not  always  fixed  by 
law,  and  when  so  fixed  can  never  legally  be  invested  at  all. 
The  insurance  reserve  may  be  and  generally  is  put  into 
long  time  securities,  securities  forbidden  in  part  even  to 
that  portion  of  bank  deposits  which  may  be  invested. 

Just  at  this  point  we  begin  to  observe  by  contrast  with 
banking  the  peculiar  service  which  life  insurance  renders. 
Banking  provides  a  common  depository  for  cash  otherwise 
unrelated  and  inefficient,  a  plan  by  which  that  money  be- 
comes in  effect  multiplied  many  times.  It  also  provides  a 


Life  Insurance  and  Commercial  Banking         337 

medium  and  a  system  of  exchange.  But  commercial  banking 
offers  no  sound,  compelling,  sociological  reason  why  great 
sums  should  be  saved  and  put  into  enterprises  of  the  utmost 
importance  to  general  society.  Its  appeal  is  purely  com- 
mercial. It  strikes  no  moral  note  except  that  of  business 
and  strict  fidelity  in  business.  Life  insurance  presents 
a  different  and  a  larger  program.  Its  appeal  is  not  com- 
mercial, but  social.  Its  purpose  is  moral.  Its  impulse  is  a 
sense  of  obligation.  It  completely  reverses  the  usual 
methods  of  social  development.  The  usual  method  is  to 
create  a  huge  debt  for  future  generations  to  pay.  The 
six  months'  note  discounted  at  the  bank  opened  the  door 
to  a  world  into  which  banking  could  not  go  very  far.  The 
six  months  was  extended  to  a  period  of  years,  especially 
in  the  matter  of  municipal  obligations,  and  the  note  was 
made  the  obligation  of  the  people.  The  sum  received  was 
spent  primarily  for  the  benefit  of  the  present  generation, 
and  was  made  into  a  debt-burden  on  future  generations, — 
a  debt  now  of  startling  proportions.  But  when  the  trans- 
action began  to  take  that  form  and  to  include  in  addition 
the  obligations  of  great  private  corporations,  the  banks 
could  act  only  as  agents;  they  could  not  put  their  deposit 
funds  into  such  securities,  and  outside  buyers  must  be  had 
or  this  program  of  industrial  and  civic  development  and 
comfort  must  be  curtailed  or  abandoned. 

The  credit  for  which  a  man  asks  when  he  insures  his 
life  is  of  a  different  sort  from  the  credit  he  gets  at  his  bank. 
Primarily  it  is  entirely  unselfish;  it  creates  no  debt  for 
future  generations  to  pay.  It  is  a  real  credit,  for  the 
benefit  of,  and  in  no  way  a  burden  on,  future  generations. 
But  as  soon  as  a  few  hundred  thousand  people  unite  in  this 
sort  of  social  enterprise,  the  credits  begin  to  assume  colossal 
proportions.  It  takes  billions  to  express  the  social  credits 
standing  now  on  the  books  of  the  American  companies 
alone.  The  small  yearly  uniform  payments  required  in- 


338  Militant  Life  Insurance 

creased  at  an  assumed  rate  of  interest,  will  ultimately  meet 
all  obligations,  as,  under  the  laws  of  mortality,  they  fall 
due.  But  as  mortality  is  low  at  younger  and  higher  at 
older  ages,  maturities  are  deferred.  This  results  neces- 
sarily in  large  accumulations  of  money  which,  unlike  money 
deposited  in  commercial  banks,  can  be  put  into  long-time 
securities.  In  a  growing  company  the  current  income  will 
always  more  than  meet  current  maturities.  If  the  business 
is  large,  the  money  of  necessity  runs  into  very  large  sums. 
This  money  must  be  invested  and  kept  invested.  The  re- 
sult is  that  the  investment  demands  of  life  insurance  have 
become  one  of  the  great  facts  on  which  sound  enterprises  of 
many  kinds  have  come  to  rely.  It  has  provided  the  securi- 
ties market  which  municipal  and  industrial  development 
demanded.  No  other  single  enterprise  absorbs  so  many 
long-time  securities  each  year— not  even  the  savings  banks. 
Incidentally,  life  insurance  has  developed  a  practice 
which  it  seems  to  me  contains  the  germ  at  least  of  an  idea 
which  may  be  utilized  in  future  efforts  to  evolve  a  sane 
and  sound  banking  and  currency  system  in  this  country. 
Some  years  ago  our  life  companies  began  to  loan  their 
own  members  sums  which  were  limited  by  the  amount  of 
reserve  held  against  a  man's  individual  contract.  The  in- 
sured could  not  and  cannot  check  against  all  he  has  paid  in, 
but  he  has  a  certain  cash  credit,  in  addition  to,  or  in 
anticipation  of,  what  I  have  called  his  social  credit,  and 
that  cash  credit  he  can  draw  on  at  any  moment.  This  we 
call  policy  loans.  The  sum  available  in  this  country  is 
large — a  single  New  York  City  company  carried  over 
$100,000,000  of  these  credits  in  its  assets  at  the  close  of  1910, 
representing  advances  to,  or  cash  drawn  by,  its  members. 
The  members  are  expected  to  repay  these  advances,  but  many 
never  do ;  they  are  duly  deducted  when  the  contract  is  sur- 
rendered or  when  it  matures.  But  a  system  under  which 
money  can  be  used  to  cover  man's  obligations  as  a  social 


Life  Insurance  and  Commercial  Banking         339 

being  and  yet  to  a  large  and  fixed  degree  be  liquid  at  all 
times  and  under  all  conditions,  has  features  which  look  desir- 
able when  we  consider  what  happens  under  our  banking  and 
currency  system  when  panic  seizes  the  people.  The  relief 
which  this  supply  of  quick  cash  brings  now  in  panic  times 
arises  in  part  from  the  fact  that  people  know  they  can't 
ask  for  all  they  have  paid  in,  as  they  could  if  the  money 
was  in  bank,  and  yet  a  portion,  sufficient  for  relief,  is 
available.  Moreover  the  securities  which  represent  the 
great  bulk  of  the  money  held  by  the  insurance  companies 
are  not  sacrificed  at  such  times,  a  condition  which  would 
inevitably  obtain  if  the  securities  were  in  the  hands  of  the 
individual  insured.  For  example,  in  1907  the  people  of 
this  country  owned  securities,  held  by  life  insurance  com- 
panies, running  in  value  into  billions.  They  all  needed 
money.  If  the  securities  had  been  individually  held,  they 
would  have  been  thrown  upon  the  market,  sold  at  a  heavy 
sacrifice,  and  panic  would  have  been  added  to  panic. 

Life  insurance  in  fact  constantly  and  successfully  faces 
panic  conditions.  Death  is  panic :  it  comes  swiftly,  silently, 
just  when  and  where  it  might  least  be  expected.  Life  in- 
surance meets  its  demands  without  delay  and  without  loss. 
Life  insurance  does  more  than  that.  Death  usually  de- 
mands and  life  insurance  pays  not  merely  the  sum  deposited 
but  a  sum  largely  in  excess  of  that.  Moreover  the  social 
efficiency  of  these  payments  is  unmatched  by  banking  or 
any  other  instrumentality  of  society.  If  the  wheat  grown 
on  our  one-time  prairies  and  in  Western  Canada  could  by 
some  magic,  without  the  delay  and  expense  of  transporta- 
tion, be  placed  immediately  before  the  hungry  millions  of 
Europe,  that  achievement  would  be  kindred  in  its  social 
effects  to  the  every  day  operations  of  life  insurance. 

Consider  then  a  few  of  the  things  that  life  insurance 
does: 


340  Militant  Life  Insurance 

1st.— It  answers  the  question  whether  or  not  a  man 
will  live  long  enough  to  provide  for  his  family. 
To  the  extent  that  money  can  represent  a  man's 
productive  power,  it  doesn't  matter  when  the 
properly  insured  man  dies. 

2d.— It  cultivates  aggressively  the  principles  of  self- 
respect  and  individual  responsibility,  which  are 
the  very  essence  of  our  civilization. 
3d.— It  prevents  the  social  defaults  which  premature 
death  otherwise  brings— defaults  which  are  quite 
as  disastrous  to  society  and  frequently  as  dis- 
honorable as  those  which  occur  in  banking  and 
general  business. 

4th.— It  meets,  as  nothing  else  does  or  can,  the  de- 
mands for  capital  of  a  society  rapidly  developing 
and  offering  the  faith  and  earning  power  of  un- 
born generations  as  security  for  money  which 
must  be  spent  now. 

5th. — It  is  a  banker  for  millions  of  people— a  banker 
who  cannot  be  ruined  through  panic,  but  who 
allows  every  depositor  to  draw  on  him  at  any  time 
to  the  extent  of  his  cash  credit. 

6th.— It  joins  business  to  a  constructive  sociology;  it 
puts  the  man  of  small  means  into  touch  with  a 
statesmanlike  plan;  it  enters  the  realms  of  im- 
agination and  takes  us  at  least  to  the  threshold 
of  a  new  social  order. 

Life  insurance  is  as  distinctively  American  as  sound  bank- 
ing is  English.  England  has  long  been  the  banking  centre 
of  the  world  because  her  people  long  ago  learned  how  to 
use  their  money  and  credit  in  the  world's  trade.  They 
centralized  it;  they  did  not  scatter  it  nor  hoard  it.  By 
this  process  they  made  what  they  had  enormously  active 
and  enormously  effective.  This  helped  powerfully  to  make 


Life  Insurance  and  Commercial  Banking         341 

England  rich.  Her  greatest  asset  to-day  is  the  confidence 
which  men  of  every  other  nation  have  in  her  commercial 
integrity  and  in  the  adequacy  and  reliability  of  her  bank- 
ing system. 

We  have  never  seemed  able  in  banking  to  take  the  best 
the  world  offered  and  then  improve  on  it.  It  is  not  a 
flattering  commentary  on  the  progress  of  representative 
government  that  in  banking  we  should  to-day  be  behind 
most  of  the  great  countries  of  the  world  and  in  the 
opinion  of  many  actually  less  efficient  than  we  were 
seventy-five  years  ago.  That  our  banking  and  currency 
systems  breed  panics  instead  of  preventing  them  the  Secre- 
tary of  the  Treasury  says  clearly,  and  the  remark  is  passed 
over  with  a  shrug  of  the  shoulders  as  being  something  per- 
fectly obvious  and  apparently  beyond  remedy.  On  the 
other  hand,  while  our  genius  for  banking  may  be  at  fault, 
something  in  our  make-up  responded  strikingly  to  what  we 
may  call  the  life  insurance  idea.  We  have  had  indifferent 
success  in  evolving  a  banking  and  currency  system ;  we  have 
had  unparalleled  success  in  the  development  of  life  insur- 
ance. What  is  there  in  our  institutions  or  in  us  which 
explains  these  contrasting  results? 

Our  whole  social  structure  rests  on  the  assumption  that 
the  individual  is  alive  as  never  before  and  nowhere  else  to 
his  obligations  as  well  as  to  his  opportunities.  Results  war- 
rant us  in  claiming  that  this  assumption  is  substantially 
sound,  however  much  we  may  at  times  deplore  certain 
phases  of  our  politics.  Our  individual  citizen  stands  for  all 
that  the  individual  ever  stood  for  in  any  form  of  demo- 
cratic or  representative  government,  and  he  has  a  concep- 
tion of  himself,  an  estimate  of  his  own  powers,  which  no 
other  citizen  ever  had.  Acquiring  this  frame  of  mind  was 
a  process  of  such  controlling  power  that  our  citizen  inci- 
dentally unlearned  or  forgot  some  of  the  necessary  lessons 
of  obedience  to  authority.  These  lessons  we  must  relearn. 


342  Militant  I/ife  Insurance 

Appealing  to  these  qualities,  to  individual  power  and 
personal  responsibility,  life  insurance  went  directly  to  the 
core  of  the  problem.  It  emphasized  individuality.  It  cul- 
tivated and  encouraged  self-respect.  This  explains  the 
colossal  structure  of  American  Life  Insurance.  The  plan 
included  the  welfare  of  general  humanity,  but  that  was  not 
the  plea  that  went  home,  the  plea  that  went  home  was  the 
appeal  to  the  citizen's  individuality. 

Now  we  begin  to  understand  that  what  seemed  at  first 
solely  an  appeal  to  individualism  emanated  from  a  plan 
which  involved  a  perfect,  a  stupendous  scheme  of  co-opera- 
tion and  centralization. 

But  here  we  should  distinguish  between  voluntary  co- 
operation—the co-operation  of  life  insurance— and  invol- 
untary co-operation.  The  latter  is  illustrated  in  the  Bank 
guarantee  laws  of  Oklahoma,  which,  with  a  strange  disre- 
gard for  the  XIV  amendment  to  the  Constitution,  the 
Supreme  Court  has  lately  upheld.  If  the  Oklahoma  laws 
are  in  harmony  with  the  doctrine  that  property  may  not 
be  taken  without  due  process  of  law,  then  I  see  no  reason 
why  New  York  State  may  not  assess  all  its  life  companies 
to  make  good  the  inefficiency  or  crookedness  of  some  com- 
panies which  may  be  or  may  become  insolvent. 

The  co-operation  of  life  insurance  is  voluntary,  but  it 
is  more  than  that.  It  involves  a  clear  statement  of  all  the 
equities.  It  leaves  nothing  to  caprice.  It  does  not  agree 
to  take  a  dollar,  invest  seventy-five  cents  of  it,  and  then 
undertake  to  pay  the  entire  dollar  on  demand.  It  puts 
behind  its  promise  to  pay  an  exact,  strongly  centralized 
plan. 

The  key- word  which  explains  the  success  of  England's 
banking  system  is  centralization.  The  key-word  which  de- 
scribes the  relative  failure  of  our  banking  and  currency 
system  is  decentralization.  "We  tried  the  central  bank  idea 
twice,  the  second  time  really  with  very  great  success.  The 


Life  Insurance  and  Commercial  Banking         343 

Second  United  States  Bank  was  finally  wiped  out  of  exist- 
ence by  Andrew  Jackson,  representing  a  recrudescence  of 
the  confederation  as  opposed  to  the  national  idea,  and  jus- 
tified in  his  action  to  some  extent  by  the  fact  that  politics 
had  crept  into  the  management  of  the  bank.  From  1836  to 
the  Civil  War  we  struggled  along  with  no  national  system 
whatever.  Then,  under  the  stress  of  a  condition  which 
involved  the  existence  of  the  nation  itself,  the  Supreme 
Court  spelled  out  of  that  clause  in  the  Constitution  which 
authorizes  the  Federal  Government  to  borrow  money,  the 
right  to  establish  a  system  of  national  banks  and  a  national 
bank  currency.  But  even  then  the  Federal  Government 
did  not  dare  return  to  the  idea  of  a  real  central  bank. 
Decentralization  asserted  itself  again,  and  the  national 
banking  reserves  were  scattered  amongst  the  thousands  of 
institutions  which  make  up  the  national  banking  system. 
This  is  the  system  which  the  Secretary  of  the  Treasury  says 
breeds  panics.  Since  1907  there  has  been  a  stronger  and 
more  intelligent  demand  for  some  remedy.  This  demand 
has  finally  taken  form  in  a  suggested  plan  for  monetary 
legislation  lately  submitted  to  the  National  Monetary  Com- 
mission by  Hon.  Nelson  W.  Aldrich.  Mr.  Aldrich 's  plan 
has  already  met  with  wide-spread  approval.  If  adopted  it 
would  introduce  into  our  banking  and  currency  system  the 
very  principles  which  explain  the  success  of  the  English 
system  and  the  principles  which  explain  the  success  of 
American  life  insurance,  namely,  voluntary  co-operation 
and  centralization  of  resources.  Whether  public  opinion  is 
prepared  now  to  go  as  far  as  the  Aldrich  plan  leads  or  not, 
no  one  can  clearly  say,  but  that  it  must  go  that  far  if  we 
are  to  have  a  banking  and  currency  system  that  doesn't 
discredit  our  intelligence  and  capacity  to  do  business  is  a 
certainty. 

American  life  insurance  for  long  periods  in  its  develop- 
ment did  not  meet  the  disintegrating  and  decentralizing 


344  Militant  Life  Insurance 

forces  which  have  kept  us  from  permanently  adhering  to 
any  adequate  banking  and  currency  plan.  What  American 
banking  has  had  to  struggle  with  from  the  beginning  life 
insurance  is  beginning  to  struggle  with  now.  Through  an 
investigation  made  in  1905  in  this  State  (resulting  in  a 
code  of  laws  many  of  which  were  excellent  and  some  of 
which  were  so  bad  as  to  be  a  disgrace  to  any  civilized 
State),  the  public  was  brought  face  to  face  with  the  size  of 
certain  American  institutions.  Some  of  the  laws,  drafted 
at  the  close  of  the  investigation  referred  to,  by  a  distin- 
guished citizen  of  this  State  reflected  the  idea  that  such 
institutions  were  a  public  menace  from  the  sheer  fact  of 
their  size  and  that  on  account  of  their  size  men  sufficiently 
honest  and  capable  could  not  be  found  to  manage  them. 

The  reaction  spread.  It  took  on  two  forms.  The  size 
and  the  success  of  these  institutions,  which  the  general 
public  had  not  before  appreciated,  led  men  in  the  central 
West  and  South  to  conclude  that  here  was  a  ready  and 
certain  way  of  making  money.  They  proceeded  to  organize 
life  insurance  companies,  and  hundreds  have  sprung  into 
existence  outside  the  State  of  New  York  within  the  last  six 
years.  Of  what  the  harvest  will  be  I  have  a  very  definite 
idea,  but  it  will  hardly  be  profitable  to  forecast  that  at  the 
present  time.  The  reaction  took  another  form  in  that  it 
stirred  up  the  various  States  of  the  United  States  to  an 
exercise  of  the  sovereignty  which,  so  far  as  insurance  is 
concerned,  the  Supreme  Court  of  the  United  States  lodged 
with  each  State  by  its  declaration,  in  the  case  of  Paul  vs. 
Virginia,  decided  in  1869,  that  interstate  insurance  is  not 
interstate  commerce.  The  result  is  that  all  insurance  is  now 
confronted  with  the  identical  political  sentiment  which  de- 
stroyed the  central  bank  and  turned  the  banking  and  cur- 
rency system  over  to  the  States  in  1836,  which  halted  the 
Federal  Government  short  of  a  program  similar  to  that 
now  proposed  by  Mr.  Aldrich,  when  it  established  a 


Life  Insurance  and  Commercial  Banking         345 

national  currency  and  national  banks,  during  the  Civil 
War. 

One  of  the  most  amazing  things  in  our  financial  history 
is  the  popular  prejudice  against  the  only  financial  systems 
that  ever  made  any  approach  to  adequacy— the  two  sys- 
tems that  rendered  the  country  the  largest  service.  The 
first  United  States  bank  was  a  potent  factor  in  rescuing  the 
country  from  bankruptcy,  the  second  was  equally  potent  in 
rescuing  it  from  financial  chaos;  both  did  much  to  supply 
the  country  with  a  uniform  currency ;  yet  the  popular  pre- 
judice against  a  United  States  bank  is  still  one  of  the  fac- 
tors to  be  reckoned  with  in  any  plan  for  reforming  our 
banking  system.  Senator  Aldrich's  plan  calls  for  "The 
Reserve  Association  of  America",  for  one  reason  because 
the  name  Central  Bank  would  be  like  a  red  rag  to  all  the 
political  bulls.  It  is  a  prejudice  bigoted,  unreasoning, 
apparently  invincible.  Because  Andrew  Jackson  thought 
the  old  United  States  Bank  unconstitutional— although  it 
was  twice  established  by  those  who  made  the  Constitution 
—is  the  end  of  argument  for  many  people.  The  winding 
up  of  both  of  the  United  States  banks  was  followed  by 
financial  troubles  that  testified  to  their  value. 

In  so  far  as  our  present  system  is  successful  it  is 
national;  it  breeds  panics  because  it  is  not  wholly  national 
and  not  centralized.  It  furnished  a  market  at  the  outset 
for  a  hundred  million  dollars  in  government  bonds  and 
gave  the  country  a  uniform  currency  under  which  no  loss 
could  come  to  the  bill  holder ;  yet  it  was  long  the  object  of 
attack,  and  but  for  the  fact  that  it  was  a  war  measure  and 
was  tied  up  with  the  national  debt  at  the  close  of  the  war, 
and  that  the  war  gave  a  tremendous  impetus  to  the  national 
idea,— it  would  not  have  survived.  It  was  no  better  in 
some  respects  than  the  best  State  systems  that  preceded  it, 
but  being  national,  it  produced  uniformity  and  drove  out 
all  inferior  systems.  There  was  prejudice  against  a  United 


346  Militant  Life  Insurance 

States  bank  because  it  represented  national  control  of  the 
currency  rather  than  State  control;  and  there  was  a  fear 
that  it  would  become  too  great  and  somehow  or  other  op- 
press the  people.  There  is  still  a  prejudice  against  a  cen- 
tral bank  upon  the  same  grounds.  It  seems  rather  strange 
that  a  people  who  are  always  boasting  of  big  things  and 
doing  big  things,  should  yet  be  afraid  of  big  things. 

Life  insurance  began  and  has  continued  under  State 
auspices.  It  has  flourished  in  the  same  centres  in  which 
State  banking  flourished.  In  other  centres  it  has  for  the 
most  part  languished  or  run  a  short  and  unsuccessful 
course;  not  always  because  of  unwise  laws,  but  usually 
because  of  lack  of  enterprise  or  disregard  of  wise  methods 
— in  a  way  somewhat  akin  to  the  banking  operations  of 
ante-bellum  times.  But  in  1905  the  contracts  of  the  great 
companies  of  New  York  and  New  England  were  every- 
where current.  Some  of  these  companies  had  grown  to 
colossal  proportions.  Not  a  company  had  failed— not  one 
was  in  danger  of  failing.  Their  faults  were  those  which 
always  accompany  great  successes.  With  the  exposure  of 
these  faults  came  rage— came  fear— came  the  frenzy  of 
destruction.  If  any  one  doubts  that  we  are  afraid  of  big 
things— especially  of  big  successes— let  him  contrast  the 
public  temper  respecting  life  insurance  in  1905-10  when  no 
company  attacked  failed,  with  that  of  1871-80,  when  over 
thirty  companies  failed  with  an  aggregate  loss  of  over  thirty 
million  dollars.  We  endure  the  great  faults  of  small  suc- 
cesses with  equanimity;  but  the  small  faults  of  great  suc- 
cesses arouse  deep-seated  prejudice  and  resentment. 

It  is  only  by  endless  discussion  and  often  by  bitter 
experience,  that  men  individually  or  socially  arrive  at  wise 
and  just  conclusions.  Wendell  Phillips  said,  "  Trust  the 
people  with  the  greatest  questions— the  discussion  of  them 
will  finally  supply  the  education  necessary  to  understand 


Life  Insurance  and  Commercial  Banking         347 

them  and  the  wisdom  to  solve  them/'  Discussion  has 
already  done  its  work. 

Some  of  the  most  unreasonable  and  repressive  features 
of  the  New  York  insurance  laws  of  1906  have  already  been 
modified;  in  other  States  the  epidemic  of  repression  under 
the  name  of  regulation  is  in  various  stages  of  development. 

Under  the  theory  that  interstate  insurance  is  not  inter- 
state commerce,  the  wonder  is  that  American  life  insurance 
has  grown  to  its  present  proportions.  That  a  business 
which  is  interstate  in  its  nature  could  succeed  when  really 
supervised  by  from  thirty  to  forty-eight  sovereign  masters 
was,  of  course,  on  the  face  of  it  utterly  improbable.  That 
it  has  succeeded  is  attributable  to  the  fact  that  the  States 
have  not  supervised.  Now  they  are  beginning  to  do  so. 
Life  insurance,  in  other  words,  is  now  face  to  face  with 
the  difficulties  from  which  banking  partially  emerged  in 
1864,  from  which,  in  the  light  of  Mr.  Aldrich's  recommen- 
dation, it  is  perhaps  about  to  emerge  wholly.  If  the 
Supreme  Court  of  the  United  States  should  change  its  mind 
and  declare  that  interstate  insurance  is  interstate  commerce, 
it  would  not  be  the  first  time  the  Court  has  changed  its 
mind,  and  it  would  have  stronger  ground  from  which  to 
argue  than  it  had  when  it  spelled  out  of  the  power  in  the 
Constitution  which  authorizes  the  Federal  Government  to 
borrow  money,  the  right  to  establish  national  banks  and  a 
national  currency.  Public  necessity  gave  us  such  national 
banking  laws  as  we  have  and  public  necessity  will  ulti- 
mately put  the  demands  of  interstate  insurance  up  to  the 
Court  so  strongly  that  there  can  be  no  question  what  its 
final  verdict  will  be.  The  opportunities  for  public  service 
that  lie  in  life  insurance  are  so  great  that  that  alone,  it 
seems  to  me,  will  go  far  toward  compelling  such  a  conclu- 
sion, because,  vast  as  it  is,  life  insurance  has  only  made  a 
beginning. 

That  no  company  in  New  York  City,  not  industrial,  has 


348  Militant  Life  Insurance 

in  all  the  world  as  many  people  insured  as  live  in  the  Bor- 
ough of  Brooklyn  alone  gives  some  idea  of  how  little  has 
yet  been  done.  That  our  largest  company  has  in  assets  a 
sum  only  about  equal  to  that  which  New  York  City  now 
owes  should  reassure  certain  statesmen.  If  we  can  admin- 
ister all  the  affairs  which  go  to  create  the  prodigious  debts 
of  the  States,  the  municipalities  and  the  industries  of  the 
nation,  we  ought  to  be  able  to  take  care  of  the  securities 
which  represent  those  debts,  especially  as  they  come  to  be 
owned  by  the  very  people  for  whose  benefit,  in  theory  at 
least,  some  of  these  debts  were  created.  Any  other  assump- 
tion is  to  declare  that  general  civic  bankruptcy  is  upon  us. 
What  is  the  present  worth  of  all  the  productive  power 
of  all  the  men  and  women  in  the  United  States?  The 
answer  to  that  question  might  stagger  any  imagination. 
What  is  the  present  worth  of  a  fraction  of  that  power? 
The  answer  to  that  would  also  reach  prodigious  totals. 
Life  insurance  totals  will  probably  never  equal  any  con- 
siderable fraction  of  that  value.  But  unless  it  is  harried 
and  taxed  to  death  by  the  fiction  that  we  are  forty-eight 
nations  instead  of  one— a  fiction  which  is  not  a  fiction  at 
all  but  a  practical  fact,— it  will  become  a  factor  in 
American  civilization  as  much  greater  than  banking  as  a 
man  is  greater  than  the  wealth  he  produces. 


LIFE  INSURANCE  AND  JUSTICE 


AN  ADDRESS   BEFORE    THE  TWENTY-SECOND   SESSION   OF   THE    TRANS-  MISSISSIPPI 

COMMERCIAL  CONGRESS,  KANSAS  CITY,  MISSOURI,  NOVEMBER,  1911. 


DEMAND  for  justice,  persistent,  insis- 
tent, almost  intuitive,  marks  every  page 
of  human  history. 

This  demand  has  overturned  dynas- 
ties, disrupted  Churches,  ruined  Repub- 
lics, beheaded  Kings.  We  know  that 
the  square  deal  is  not  easily  secured  in 
this  busy  age  and  apparently  it  never 
has  been  easy  to  get  in  any  age. 

Justice  is  ostensibly  the  basis  of  all  ethical  codes,  the 
object  of  all  legal  procedure,  the  controlling  purpose  which 
underlies  all  civil  government.  However  widely  men  may 
differ  as  to  what  justice  requires— however  little  they  may 
really  desire  that  justice  be  done— such  homage  is  paid  to 
the  word — to  the  idea  of  justice— that  no  one  ventures 
openly  to  advocate  injustice. 

Necessity  early  drove  men  to  combine.  They  had  all 
kinds  of  enemies  and  only  by  combining  against  them  could 
they  survive.  Combination  meant  organization,  meant  the 
adoption  of  rules  under  which  the  social  and  civil  game  was 
to  be  played.  The  adoption  of  rules  meant  the  delegation, 

349 


350  Militant  Life  Insurance 

to  some  extent,  to  his  associates  of  what  had  previously  been 
a  man's  sole  prerogative.  He  got  protection  and  he  gave 
up  some  part  of  that  perfect  freedom  which  he  had  when  he 
roamed  the  earth  without  association  with  others— if  in- 
deed he  ever  did  that. 

The  larger  the  society  into  which  man  entered  the  more 
complex  the  organization.  The  more  complex  the  organiza- 
tion the  more  a  man  got  and  the  more  of  so-called  individual 
liberty  he  gave  up. 

In  so  far  as  individual  liberty  was  surrendered  it  be- 
came the  subject  of  public  definition  and  public  adminis- 
tration. This  men  were  slow  to  recognize.  They  quickly 
took  the  protection  which  organized  society  brought  to 
them,  the  greater  safety,  the  larger  opportunity,  the  better 
conditions  of  life,  but  they  were  slow  to  recognize  that 
what  they  had  before  been  able  to  do  as  individuals  they 
could  no  longer  do.  This  immediately  gave  rise  to  con- 
flicts of  opinion,  conflicts  of  interest;  and  under  this  plan 
of  organization,  the  problem  immediately  became  and  re- 
mains— JUSTICE — how  to  give  it  and  how  to  get  it. 

The  problem  presents  two  phases: 

The  first— conflicts  arising  within  the  artificial  struc- 
ture of  society  itself; 

The  second— conflicts  between  men  and  the  forces  of 
nature,  conflicts  which  for  lack  of  a  better  name  we  call 
"the  struggle  for  existence ". 

And  first  as  to  conflicts  between  men,— conflicts  for 
more  or  less  of  personal  rights,  for  more  or  less  of  property 
rights— the  greed  of  the  strong,  the  sufferings  of  the  weak, 
the  slaughter  of  the  inefficient.  All  these  and  more  are 
merely  problems  of  how  to  get  justice,  how  to  give  it,  in 
the  social  order. 

The  simplest  forms  of  associated  life  develop  certain 
antagonisms  and  opposing  interests  which  are  not  easily 
reconciled.  Clamor  follows.  We  cannot  dismiss  this  clamor 


Life  Insurance  and  Justice  351 

as  the  empty  complaint  of  selfish  individuals  and  cliques. 
The  outcome  of  the  struggle— poverty,  hardship  and  stunted 
lives— show  clearly  enough  that  the  organization  has  been 
very  imperfect,  that  there  has  been  great  injustice  some- 
where. 

The  world  generally  has  cast  out  Kings,  not  so  much 
because  the  doctrine  of  Divine  Right  has  been  repudiated 
as  because  Kings  frequently  became  tyrants  and  dispensed 
tyranny  and  not  justice.  Whenever  a  King  was  great 
enough  to  dispense  justice,  his  own  people  rarely  disturbed 
him.  Such  rulers  have  been  cast  out  by  rival  Kings  or  by 
the  Church,  but  not  by  the  people.  The  people  are  willing 
to  a  large  degree  to  be  ruled;  they  can't  themselves  actually 
rule.  It  takes  so  much  time  and  strength  to  make  a  living, 
to  do  the  undramatic  and  necessary  work  of  each  recurring 
day,  that  there  is  neither  time  nor  strength  left  for  ruling. 
But  man  has  found  out  that  when  rulers  represent  him  he 
comes  nearer  to  attaining  justice  than  he  did  when  they 
were  supposed  to  represent  God.  So  he  has  gradually 
adopted  representative  forms  of  government,  learning 
meantime  to  do  justice,  to  control  himself  and  in  that  way 
to  lighten  the  burdens  of  those  who  govern. 

But  he  is  still  a  long  way  from  securing  justice  through 
government. 

A  world  view  reveals  a  shocking  condition  in  this  re- 
spect. The  attitude  of  nations  toward  each  other  is  less 
frankly  hostile  than  in  the  earlier  days,  but  the  hostility 
is  now  backed  up  with  implements  of  destruction  so  fright- 
ful in  their  power  that  the  barbarism  which  triumphed 
over  Rome  was  in  comparison  a  humane  and  civilized  con- 
dition. And  for  it  all  the  people  pay.  But  if  justice  ruled 
it  would  all  disappear. 

Limiting  our  view  to  the  status  of  individual  nations  and 
studying  how  national  armaments  are  maintained,— we  get 
another  view  of  injustice.  These  establishments  are  main- 


352  Militant  Life  Insurance 

tained  by  taxation,  and  no  just  system  of  taxation  has  ever 
been  devised.  Not  only  these  national  establishments  but 
all  the  vast  machinery  of  national  and  state  life  are  sus- 
tained by  taxation.  And  when  we  look  into  systems  of 
taxation  we  wonder  at  the  patience  and  long-suffering 
of  men. 

The  study  of  no  single  phase  of  society  will  bring  such 
conviction  of  its  general  inefficiency  and  injustice  as  a  study 
of  taxation.  The  general  property  tax  is  theoretically 
sound,  but  practically  oppressive  and  inefficient.  The  tax 
on  real  estate— which  is  a  part  of  the  general  property 
tax— penalizes  the  progressive  man  and  rewards  the  para- 
site who  gets  in  the  road  of  progress  and  gets  rich  out  of 
the  unearned  increment.  The  income  tax  is  theoretically 
perfect,  but  practically  unfair  and  unjust:  first,  because, 
as  applied,  it  always  sets  class  against  class;  and,  second, 
because  it  is  the  most  difficult  of  all  taxes  fairly  to  assess 
and  collect.  Because  of  the  inquisitorial  methods  necessary 
in  its  assessment  it  is  cordially  hated  wherever  it  exists  and 
is  to  the  great  school  of  liars  what  the  Frigid  Zone  is  to 
certain  migratory  birds— their  natural  breeding  ground. 
The  excise  tax  is  virtually  either  an  income  tax,  or  a  tax 
upon  business  activity  without  reference  to  profits.  The 
tariff  tax  takes  from  the  consumer  vastly  more  than  it 
gives  the  government,  and  where  the  balance  shall  go  is 
at  the  bottom  of  all  tariff  struggles. 

The  collateral  inheritance  tax,  otherwise  known  as 
death  duties,  may  have  some  justification,  but  on  its  face 
it  is  cowardly  and  provokes  radical  action  because  of  its 
cowardly  nature. 

We  charge  a  man  with  the  duty  of  establishing  a  home, 
of  making  provision  for  his  dependents,  in  order  to  for- 
ward national  development  and  protect  the  State,  and 
when  he  dies  and  can  no  longer  defend  himself,  we  take 
even  from  those  who  are  of  his  own  blood  a  percentage  so 


Life  Insurance  and  Justice  353 

large  that  the  New  York  Legislature,  driven  by  public 
opinion,  recently  reversed  its  earlier  action,— taken  at  the 
instance  of  a  radical  Governor,— and  re-wrote  a  law  under 
which  an  estate,  after  satisfying  the  demands  of  New  York 
and  other  States,  might  not  only  have  been  greatly  de- 
pleted but  substantially  destroyed. 

The  extreme  features  of  some  of  these  laws  represent 
the  same  statesmanship  which  taxes  the  premiums  of  life 
insurance  companies.  The  State  needs  the  money;  it  is 
easy  to  get,  and  there  is  no  such  thing  as  a  State  con- 
science which  may  rebel  because  the  dead  or  the  defenseless 
are  wronged. 

And  what  shall  we  say  of  the  effect  of  religion  in  secur- 
ing the  reign  of  justice  on  the  earth  ?  One  hesitates  to  speak 
in  other  than  terms  of  praise  of  a  subject  that  deals  with 
what  is  most  sacred  to  the  human  heart ;  and  yet  it  must  be 
confessed  that  the  principle  of  exclusion  which  runs 
through  all  the  great  religions  has  been  at  the  root  of  the 
greatest  antagonisms  and  the  gravest  injustices.  The  claim 
to  superiority  might  have  safely  been  left  to  be  vindicated 
by  experience,  but  when  men  claimed  to  be  the  sole  recipi- 
ents of  a  divine  revelation  and  the  sole  repositories  of  divine 
truth,  they  naturally  became  proselyters,  and  when  they 
attained  power  they  just  as  naturally  became  persecutors. 
No  other  subject  has  divided  men  more  radically ;  none  has 
been  the  cause  of  deeper  animosities;  in  no  conflicts  have 
greater  cruelty  and  injustice  been  perpetrated.  Religion 
is  still  a  source  of  injustice  wherever  there  is  a  church 
established  by  law.  In  this  particular— perfect  religious 
liberty— we  have  unquestionably  advanced  so  far  that  we 
may  fairly  be  said  to  have  outstripped  the  rest  of  the  world. 

Again  take  the  processes  of  law.  Look  at  the  operation 
of  that  part  of  government  which  is  devoted  especially  to 
securing  justice— the  Courts.  Have  you  ever  been  a  liti- 
gant? Have  you  ever  sat  on  a  petit  jury?  or  on  a  grand 


354  Militant  Life  Insurance 

jury?  What  impression  have  any  or  all  of  these  expe- 
riences left  on  your  mind  ?  How  often  have  you  had  justice 
when  a  litigant?  What  kind  of  deliberation  did  you 
observe  in  the  workings  of  any  jury  to  which  you  have  be- 
longed ? 

Law  is  not  a  science,  not  an  end,  but  a  means  to  an 
end,  and  that  end  is  justice.  But  with  us  law  has  become 
an  institution,  and  when  any  portion  of  organized  society 
becomes  institutional  it  is  likely  to  become  archaic;  when 
it  becomes  archaic  it  becomes  reactionary.  We  are  faced 
with  that  condition  now. 

Have  you  seen  business  genius  and  efficiency  develop  to 
such  a  degree  that  it  made  the  United  States  the  admiration 
and  wonder  of  the  world  ?  And  have  you  seen  that  splendid 
structure  riddled  by  the  bullets  of  legal  uncertainty,  fired 
not  only  by  demagogues  but  by  the  government  itself  1  You 
have  seen  all  that,  and  to-day  American  business  desper- 
ately stricken  in  the  quarrel  between  the  Republican  Capu- 
lets  and  the  Democratic  Montagues,  cries,  as  it  staggers  and 
hesitates,  "A  plague  o'  both  your  houses." 

You  will  recall  that  Mercutio  not  only  denounced  both 
the  great  quarreling  houses  of  Verona,  but  expressed  the 
shame  he  felt  because  he  had  been  mortally  hurt  by  an 
unworthy  foe  through  the  well-intentioned  meddling  of  a 
friend.  He  said:  "Zounds!  A  dog,  a  rat,  a  mouse,  a  cat, 
to  scratch  a  man  to  death.  A  braggart,  a  rogue,  a  villain, 
that  fights  by  the  book  of  arithmetic."  His  description  of 
how  he  was  done  to  death  sounds  like  an  inspired  fore- 
cast of  how  American  business  was  to  be  scratched  to  death. 
His  analysis  of  Tybalt's  methods  is  strongly  reminiscent 
of  the  mental  attitude  of  the  chief  law  officer  of  the  govern- 
ment who  "fights  by  the  book  of  arithmetic". 

The  assault  on  business  really  began  six  years  ago  with 
the  assault  on  life  insurance.  Politicians  then  learned  that 
sensationalism  was  politically  profitable.  They  learned 


Life  Insurance  and  Justice  355 

that  a  path  to  preferment  and  fame  lay  open  before  the 
man  who  fed  sensationalism  while  properly  attacking  faults. 
They  learned  that  every  established  principal  of  economics, 
every  sound  doctrine  in  legislation,  could  be  violated  and 
the  violation  counted  a  distinction,  if  such  action  seemed 
to  be  a  part  of  an  assault  on  size  and  success  and  the 
evils  which  usually  go  with  great  successes.  No  declaration 
yet  made  in  any  of  the  assaults  on  business  has  been 
economically  so  reactionary,  so  radical,  as  the  flat  declara- 
tions made,  in  February,  1906,  by  the  Committee  of  the 
New  York  Legislature,  known  as  the  Armstrong  Commit- 
tee. They  declared  that  certain  institutions  were  bad  be- 
cause they  were  great,  and  they  wrote  that  doctrine  into 
law.  They  declared  that  beneficence,  grown  large,  had 
become  a  public  menace,  and  they  wrote  that  doctrine 
into  law.  They  declared  that  the  limits  of  human  integ- 
rity and  capacity  had  been  reached  in  these  institutions, 
and  they  wrote  that  doctrine  into  law.  They  declared 
that  the  State  must  now  protect  the  public,  not  alone  by 
control,  by  publicity  and  by  strict  accountability,  but  by 
arbitrary  limitations  which  were,  by  their  very  nature,  de- 
structive, and  they  wrote  that  doctrine  into  law. 

The  life  companies  of  the  country — some  of  them 
guilty  of  serious  errors,  properly  chargeable  with  gross 
derelictions — were  nevertheless  so  strong  because  of  the 
principles  which  underlie  them  and  because  of  the  essen- 
tial integrity  of  their  management,  that  they  rallied  from 
the  assault  and  have  with  general  success  readjusted 
themselves  to  meet  the  demands  of  the  new  laws — some 
of  which  are  most  excellent,  some  a  disgrace  to  a  self- 
governing  country. 

But  that  was  only  a  beginning— only  a  prophecy. 
The  politician — whose  chief  ambition  is  not  construction, 
but  putting  the  other  fellow  in  a  hole — saw  his  oppor- 
tunity. General  business  was — with  life  insurance — 


356  Militant  Life  Insurance 

guilty  of  great  success;  it  was  guilty,  too,  in  some  par- 
ticulars, of  gross  errors — of  practices  which  no  man 
could  defend.  The  opportunity  was  too  fine  to  let  pass. 
The  average  statesman  saw  preferment  and  glory  and 
fame  in  a  bitter  assault.  That  general  business  is  a  deli- 
cate, sensitive  structure,  unable  to  stand  long  under  the 
strain  of  suspicion  and  uncertainty  meant  nothing  to  him. 
He  knew  from  what  he  had  already  seen  that  the  attack 
would  be  popular ;  it  might  help  his  party ;  it  would  almost 
certainly  help  him;  there  was,  moreover,  a  rare  opportu- 
nity in  the  provisions  of  a  sleeping,  archaic  law — the 
meaning  of  which  no  one  then  knew,  the  full  meaning  of 
which  no  one  knows  now. 

The  attack  was  made.  It  has  been  kept  up.  And  now 
we  are  getting  the  answer.  The  law  failed  to  prevent 
widespread  injustice  while  the  great  business  combina- 
tions were  being  organized  and  built  up.  Now,  after  the 
injustice  has  been  done,  and  the  great  organizations  have 
developed  the  efficiency  and  economy  which  are  necessary 
to  meet  world-wide  competition,  the  law  inflicts  wide- 
spread injustice  in  seeking  to  tear  these  combinations  to 
pieces. 

If  it  be  true  that  for  many  years  our  nursery  of  states- 
men was  what  is  vaguely  known  as  * '  Wall  Street ' '  and  its 
influences,  it  is  equally  true  that  recently  our  nursery  of 
statesmen  has  been  the  office  of  the  prosecuting  attorney 
and  the  special  inquisitor.  Both  types  are  deadly;  both 
types  spell  injustice.  Unless  I  misread  the  indicated  pur- 
poses of  the  people,  neither  type  has  any  place  in  the 
statesmanship  of  the  future. 

Isn't  it  true,  generally  speaking,  that  we  get  in  busi- 
ness closer  to  the  square  deal  than  we  do  in  any  relation 
we  sustain  to  organized  government,  to  any  demands  of 
society  ? 

One  reason  for  this  is  that  business  is  not  largely 


Life  Insurance  and  Justice  357 

institutional.  Its  methods  are  always  the  product  of 
struggle — struggle  with  shifting  human  conditions.  It 
is  governed  not  by  constitutional  limitations  but  by  con- 
tract, and  the  contracts  of  business  constantly  expire  or 
are  modified  by  agreement. 

Business  represents  a  bilateral  contract.  Both  parties 
to  a  transaction  must  respond,  must  get  together,  or 
nothing  is  done.  Moreover,  there  are  clearly  stated  pen- 
alties in  the  contract,  which  are  enforceable,  and  are 
enforced,  except  as  the  law  fails  to  perform  its  proper 
function.  Not  so  in  our  duties  to  society  or  government. 
In  theory  our  social  and  civic  duties  constitute  a  contract 
of  the  same  character,  and  in  fact  our  plan  of  government 
cannot  achieve  any  great  and  lasting  success  unless  they 
are  so  regarded.  But  they  are  not  so  regarded  by  most 
men.  Men  dodge  their  taxes;  they  neglect  their  civic 
obligations;  they  vote  for  their  own  advantage.  They 
do  this  because  they  can. 

Why  shouldn't  society  and  government  be  conducted 
as  business  is  conducted?  Is  it  possible  to  devise  a  plan 
under  which  a  neglect  of  a  social  or  civic  duty  will  be 
visited  with  penalties,  just  as  a  business  lapse  is  visited 
with  penalties? 

Is  it  possible  for  free  men  to  deal  with  each  other  in 
social  and  civic  matters  as  they  do  in  business  matters? 

Notwithstanding  what  the  makers  of  text  books  tell 
us,  government  is  not  a  science.  It  probably  never  will 
be.  It  might  be  a  sensible  business  system;  but  it  is  not 
yet  that  in  this  country. 

In  Germany  municipal  government  has  advanced 
far  toward  that  ideal.  Governing  German  cities  is  a 
profession.  The  Mayor  is  chosen  as  a  Railroad  Presi- 
dent is  chosen  here,  because  he  has  distinguished 
himself  in  administration.  The  Mayor  is  frequently  not 
a  resident  of  the  city  whose  affairs  he  is  chosen  to  ad- 


358  Militant  Life  Insurance 

minister.  This  is  one  of  the  facts  which  explain  the 
wonderful  cleanliness  and  order  and  attractiveness  and 
comfort  of  the  leading  cities  of  that  Empire.  Here  is  at 
least  a  business-like  plan.  Politics  have  no  place  in  it. 

But  in  our  civil  governments  there  is  no  plan  ap- 
proaching in  effectiveness  the  processes  of  ordinary  busi- 
ness. The  great  weakness  of  every  existing  democratic 
civilization  is  that  under  its  operation,  and  chiefly  because 
of  its  inability  to  secure  justice  between  man  and  man, 
the  strong  rob  the  weak  and  to-day  take  more  than  their 
just  share  of  the  products  of  labor,  and  to-morrow  the 
weak  combine  and  rob  the  strong  and  menace  everything 
with  mob-rule  through  disregard  of  constitutional  limi- 
tations. 

In  contrast  with  these  forms  of  associated  effort — with 
their  endless  rivalries,  cruelties  and  injustice,  stands  a 
world-wide  system  which  seeks  certain  definite  and  tangi- 
ble ends  by  methods  based  on  clearly  defined  principles.  The 
ends  are  the  embodiment  of  justice,  the  methods  are  very 
largely  mathematical  demonstrations.  Men  unite,  in  this 
system,  upon  the  basis  of  what  they  are,  without  preju- 
dice, or  fear,  or  adventitious  circumstance.  We  call  the 
system  Life  Insurance.  As  a  matter  of  fact,  it  is  a  great 
system  of  self-government,  based  on  a  code  of  laws  into 
which  no  Supreme  Court,  in  order  to  save  the  situation, 
will  ever  be  forced  to  read  either  absent  words  or  doubt- 
ful meanings. 

It  represents  the  dawn  of  race  consciousness;  and  the 
absence  to-day  of  race  consciousness  explains  a  large  part 
of  the  injustice  which  marks  the  operations  of  nations,  of 
society  and  of  religion. 

We  are  accustomed  to  speak  of  the  payments  to  life 
insurance  policy-holders  as  benefactions — as  if  they  were 
in  no  real  way  a  liquidation  of  debts,  but  gifts  which  the 


Life  Insurance  and  Justice  359 

insured  might  have  omitted  without  blame.  The  time  has 
now  arrived  when  the  discussion  should  be  lifted  to  a 
higher  level. 

Life  Insurance  is  and  always  must  be  beneficent — 
but  not  in  the  ordinary  meaning  of  the  word.  Benefi- 
cence usually  implies  that  the  benefactor  is  entirely  free 
to  bestow  or  withhold  his  benefaction.  For  example: 
Here  is  a  wealthy  citizen  who  builds  a  great  hospital, 
equips  it  and  dedicates  it  to  public  use.  That's  a  fine 
thing  to  do.  But  we  should  hardly  be  warranted  in  criti- 
cising him  if  he  failed  to  do  it;  we  couldn't  say  he  had 
been  guilty  of  an  act  of  injustice.  Does  life  insurance 
represent  that  sort  of  beneficence?  May  a  man  fail  to 
insure  his  life  and  be  equally  free  from  criticism,  equally 
beyond  the  reach  of  a  charge  that  he  has  been  guilty  of 
an  injustice?  By  no  means.  Life  insurance  is  the  sole 
means  by  which  the  average  man,  as  a  member  of  the  com- 
munity, may  be  just  to  his  family  and  to  society.  In 
other  words,  the  average  man  cannot  refuse  or  neglect 
to  insure  his  life  without  being  guilty  of  an  affirmative 
act  of  injustice.  Life  insurance  in  short  is  a  device  by 
which  two  defects  in  the  social  order — each  productive 
of  grave  injustices — are  remedied.  The  social  order  does 
not  enforce  proper  penalties;  life  insurance  must  and 
does.  In  the  social  order  the  only  method  of  capitalizing 
a  man's  future  earning  power  (and  his  future  earning 
power  is  the  average  man's  sole  asset)  is  by  the  use  of 
credit.  Credit  is  limited  and  rendered  unstable  by  the 
constant  menace  of  death.  Life  insurance  broadens  credit 
by  the  substantial  elimination  of  this  menace.  It  puts  be- 
hind the  frailty  of  men  standing  alone  the  immeasurable 
strength  of  men  standing  together.  As  a  result,  there 
are  no  antagonisms,  no  struggles,  when  men  are  associ- 
ated in  this  way.  Their  interests  are  mutual — as  they  are 


360  Militant  Life  Insurance 

theoretically  in  general  society — and  they  are  bound — 
as  they  are  not  in  the  social  order — to  do  exact  justice  and 
to  receive  exact  justice.  All  inequalities  are  adjusted — 
in  a  degree  that  obtains  under  no  other  form  of  associa- 
tion— in  the  contracts  under  which  they  are  insured.  All 
contingencies  of  continuance  and  withdrawal  are  pro- 
vided for  in  advance,  upon  the  basis  of  justice  to  all  and 
special  favor  to  none.  When  death  ends  the  contract 
there  are,  indeed,  varying  returns  upon  the  money  paid 
in,  but  these  varying  returns  meet  corresponding  deficits 
caused  by  the  event  of  death — they  prevent  corresponding 
degrees  of  injustice  which  would  otherwise  be  inflicted. 

And  this  brings  us  to  the  second  phase  of  the  problem : 
the  conflict  between  men  and  the  forces  of  nature. 

The  injustices  of  society  result  largely  from  the  fear 
of  death,  from  dread  of  that  grim  visitor  who  may  call 
on  us  at  any  moment.  This  fear  drives  the  noblest  of 
human  impulses, — love  of  children,  love  of  wife,  love  of 
home  —  into  violent  action.  To  protect  his  own  a  man 
will  rob  his  neighbor ;  to  defend  his  children  he  will  offer 
his  all.  Remove  from  him  to  any  extent  this  haunting 
fear  of  death  and  you  will  have  gone  far  toward  the  solu- 
tion of  an  elemental  question.  Governments  and  civil 
societies  and  religions  haven't  done  much  practically  to 
banish  this  fear.  Governments  have  emphasized  it  by 
becoming  armed  camps,  by  putting  all  citizens  on  notice 
that  in  its  interest  every  man  may  have  at  once  to  march 
out  to  slaughter  other  men  or  be  themselves  slaughtered. 

Many  religions  still  insist  that  men  will  be  judged  in 
the  world  to  come  according  to  belief  rather  than  accord- 
ing to  character — according  to  rites  and  ceremonies  and 
the  acts  of  others  on  their  behalf  rather  than  according  to 
what  they  themselves  have  done;  and  they  have  cast 
around  the  natural  fear  of  death  the  lurid  and  awful 


Life  Insurance  and  Justice  361 

shadows  of  a  world  where  suffering  is  not  even  mitigated 
by  hope. 

Into  all  this  mephitic  atmosphere  the  Plan  of  Life 
Insurance  comes  and  clears  it  as  a  bolt  of  lightning  shot 
through  a  lowering  cloud  clears  the  sky.  When  the  bolt 
clears  the  air  a  number  of  other  things  happen:  it  rains, 
and  then  the  sun  comes  out  and  the  birds  begin  to  sing. 

When  men  so  dreadfully  feared  death  and  had  no 
recourse  they  rebelled  or  they  lied  or  they  stole,  not  be- 
cause they  wanted  to  but  because  they  knew  no  other  way 
to  meet  the  injustice  which  seemed  imbedded  in  the  very 
plan  of  life  itself.  To  put  the  obligations  of  life,  the 
material  obligations  of  life  upon  a  man  and  then  set 
death  on  his  track — death  which  might  at  any  moment 
rob  him  of  the  one  thing  he  needed — namely,  time — was 
intuitively  felt  to  be  cruel  and  unfair.  Treat  a  man  un- 
fairly and  he  is  at  once  a  potential  rebel.  Plant  fear  in 
his  heart  and  you  make  him  cruel  and  cowardly.  Give 
him  a  chance  and  a  square  deal,  give  him  justice  and  he 
is  loyal  at  once.  Banish  fear  and  you  recreate  him. 

Life  insurance  is  the  square  deal.  It  banishes  this  fear. 
What  wonder  then  that  even  in  the  presence  of  that  great 
mystery — death — the  selfishness  and  clamor  of  men  are 
hushed,  as  they  take  their  places  in  a  system  which 
equalizes  burdens  and  benefits,  fate  and  fortune,  and 
secures  justice  and  equity  when  all  other  systems  fail ! 

Life  insurance  reveals  the  vast  possibilities  of  scien- 
tific co-operation.  Scientific  co-operation  does  not  banish 
competition;  it  does  banish  what  Tennyson  calls  the 
"red  tooth  and  claw".  Neither  does  it  run  into  the  de- 
moralizing weaknesses  of  charity,  nor  the  vagaries  of 
socialism.  To  the  doctrine  of  "social  ownership  and  con- 
trol of  all  means  of  production,  distribution  and  ex- 
change", the  Socialistic  platform,  it  is  entirely  hostile. 


362  Militant  Life  Insurance 

It  is  a  working  plan  of  self-government,  at  once  scientific, 
humane  and  just.  Applying  the  principle  to  civic  prob- 
lems, isn't  it  conceivable  that  every  citizen  on  reaching 
maturity  and  acquiring  the  right  of  franchise  can  be 
rated,  as  a  citizen,  just  as  the  individual  is  rated  when 
he  applies  for  life  insurance?  Is  there  no  way  of  calcu- 
lating and  stating  with  workable  exactness  what  a  man 
must  pay  to  general  society  if  he  is  to  get  certain  things 
in  return?  And  is  there  no  way  of  stating  with  equal 
exactness  what  a  man  shall  forfeit  if  he  takes  social  and 
civic  benefits  and  fails  to  perform,  the  social  and  civic 
duties  prescribed?  Is  a  plan  of  government  inconceivable 
which  shall  encourage  the  strong  and  yet  control  the 
greedy,  which  shall,  with  exactness  measure  to  a  man 
what  he  shall  ultimately  take,  and  yet  put  substantially 
no  limit  on  what  he  may  take  if  he  pays  the  just  price? 
A  plan  in  which  the  good  order  and  certainty  and  justice 
of  business  shall  be  as  clearly  present  as  they  are  now 
certainly  absent? 

Life  insurance  is  such  a  plan.  It  not  only  applies 
these  doctrines  rigidly  to  great  bodies  of  men,  but  so 
strongly  have  men  responded  that  the  accumulated  social 
and  human  values  now  represented  by  life  insurance  al- 
most surpass  imagination.  It  is  already  a  series  of  re- 
publics whose  dominions  are  co-extensive  with  human 
affection. 

Here  are  no  questions  of  personal  rights — all  rights 
are  clearly  defined  and  enforced;  no  question  of  greed 
because  even  the  greedy  cease  their  striving  when  they 
know  that  they  can  gain  nothing  and  are  sure  they  shall 
lose  nothing ;  no  question  of  unfair  taxation ;  no  question 
of  so-called  patriotism  and  military  establishments;  no 
question  of  State  Eights;  no  question  of  Federal  Power. 
All  these  questions  confront  life  insurance  and  attack  it, 
but  never  from  within. 


Life  Insurance  and  Justice  363 

A  system  thus  founded  and  administered  realizes  in  a 
greater  degree  than  industrialism  or  any  existing  form  of 
civil  government  or  religion,  Sydney  Smith's  noble  char- 
acterization of  justice : 

"Truth  is  Its  handmaid, 
freedom  is  its  child, 
peace  is  its  companion, 
safety  walks  in  its  steps, 
victory  follows  in  its  train." 


OTHER  ADDRESSES 


1804  - 1904 
CENTENNIAL  ORATION 


AT  BURLINGTON,  VERMONT.  JULY  6,  1904,  ON  THE  OCCASION  OF  THE  ONE 
HUNDREDTH  COMMENCEMENT  or  THE  UNIVERSITY  OF  VERMONT. 


A  RETROSPECT. 

:N  "As  You  Like  It,"  Touchstone,  the 
cynic,  the  worldly-wise,  asks  the  simple 
countryman,  William,  patronizingly,  and 
with  something  of  a  sneer,  "Wast  born 
i'  the  forest  here?"  and  William  an- 
swering, and  unconsciously  expressing 
at  the  same  time  inborn  affection  for 
the  fields  and  the  Forest  of  Arden,  says : 
"Aye,  sir,  I  thank  God".  If  to  us,  chil- 
dren of  this  Forest  of  Arden,  some  Touchstone  from  the 
larger  world  should  come  to-day,  full  of  wise  saws  and 
patronage,  and  ask  "Wast  born  i'  Vermont  here?"  the 
same  answer,  breathing  the  same  affection,  would  come 
from  each  as  quick  and  as  pat  as  from  William,  and  with 
more  meaning:  "Aye,  sir,  I  thank  God."  Whether  we 
claim  fellowship  here  by  birth  or  blood  or  training,  or  by 
all  three,  affection  is  the  same.  Our  affection  for  every- 

367 


368  Other  Addresses 

thing  that  bears  the  sign-manual  of  the  University,  our 
respect  for  anything  that  comes  out  of  these  green  hills, 
are  unreasoning,  no  doubt,  but  we  love  that  very  unrea- 
son and  we  pity  people  who  have  no  such  heritage.  If, 
therefore,  we  briefly  give  this  unreason  rein,  and  for  a 
moment  lightly  follow  whithersoever  it  leads,  may  we  not 
plead— if  justification  be  sought— that  the  traditions,  the 
memories,  the  affections,  the  customs,  the  hopes,  the  fears, 
and  the  heroisms  centered  in  these  celebrations,  once  in- 
voked, have  cabalistic  powers  and,  in  turn,  have  aroused 
spirits  that  are  not  easily  controlled— spirits  that  bring 
to  our  quickened  sensibilities,  through  the  dim  aisles  of 
tradition  or  perhaps  over  the  unmeasured  seas  of  heredity 
and  sub-consciousness,  the  din  of  battles  that  reach  from 
Ticonderoga  to  Gettysburg, — the  story  of  a  struggle  that 
began  with  Daniel  C.  Saunders  in  1800  and  will  be  trans- 
mitted by  the  Class  of  1904. 

This  is  our  second  Jubilee.  Fifty  years  ago  the  Uni- 
versity of  Vermont  summoned  her  children  home,  and 
with  becoming  dignity  and  great  pride  reviewed  the 
history  that  had  then  been  made.  In  glad  obedience  to  a 
like  summons,  we  are  now  assembled  at  the  One  Hun- 
dredth Commencement. 

Normally,  we  are  rational  men  and  women, — some 
of  us  still  young,  some  of  us  almost  old,  but  to-day  we 
are  all  young  and,  we  confess,  a  little  irrational.  Age  is 
a  matter  of  the  mind,  and  if  we  choose  to  say  that  we  are 
an  hundred  years  young, — to  assume  that  the  fellowship 
of  scholars  is  like  the  communion  of  the  Saints, — the  cen- 
tury becomes  not  an  expression  of  distance  or  a  measure 
of  time,  but  an  audience  chamber  into  which  the  sum- 
mons of  Alma  Mater  has  brought  every  saint,  every  hero 
and  every  scholar,  living  or  dead,  who  belongs  to  this 
Gild. 

Our  irrationality  takes  that   form   and  pleases  itself 


1804—1904  Centennial  Oration  369 

with  that  conceit.  Therefore,  while  we  see  and  honor  the 
men  who  represent  the  organic  life  of  the  University  and 
the  State,  we  also  see  with  them  another,  a  larger,  a  most 
distinguished  company — men  of  heroic  mould,  men  from 
our  heroic  age,  men  who  dared  much,  suffered  much,  achieved 
much ;  men  who,  in  the  perspective  of  history,  loom  so  large 
that,  seeing  them,  we  are  disposed  to  cry  with  Donne : 

"We  are  scarce  our  fathers'  shadows,  cast  at  noon." 

With  the  undergraduates  we  see  other  young  men 
and  women,  with  faces  as  eager,  in  lines  of  various 
lengths,  but  an  hundred  deep;  all  the  processions  of  all 
Commencement  Days  coalesce ;  the  Class  of  1804  marches 
with  the  Class  of  1904,  and  is  as  young. 

The  life  of  a  century  is  here  and  reveals  itself  with  a 
certainty  of  touch  and  a  clearness  of  vision  that  surpass 
reality.  If  I  could  project  upon  a  screen  the  pictures 
which  your  memories  hold,  and  with  them  the  scenes  that 
this  other  silent  but  not  unreal  company  would  depict, 
and  move  them  in  panorama  before  all  eyes,  they  would 
record  the  struggles  of  this  College  and  of  the  State  as  they 
can  never  be  written.  That  we  cannot  give  them  material 
color  and  form  does  not  detract  at  all  from  their  reality. 
The  picture  that  is  so  vivid  to  you,  however,  is  probably 
beyond  the  vision  of  your  neighbor.  We  have  all  been 
touched  with  Hamlet's  madness,  and  see  that  which 
arouses  our  very  souls  where  other  eyes  see  nothing. 

In  our  fanciful  audience  chamber  there  are  various 
groups:  there  are  the  men  of  the  Revolution  and  of  Ver- 
mont 's  period  of  independence ;  the  men  of  the  first  half- 
century  and  of  the  first  jubilee ;  the  men  of  the  last  half- 
century ;  the  men  of  the  present  day. 

Was  there  ever  another  such  story  as  that  which 
tells  how  the  territory  between  Lake  Champlain  and  the 
Connecticut  River  came  to  be  an  independent  republic 


370  Other  Addresses 

and  then  a  State  of  the  Union?  Is  there  recorded  a  finer 
struggle  for  human  freedom?  Every  State  in  the  Union 
has  an  inspiring  history,  but  no  other  in  the  entire  forty- 
five  has  such  a  history  as  Vermont. 

The  men  who  settled  the  New  Hampshire  Grants 
were  first  of  all  pioneers — men  of  imagination  and  cour- 
age and  resources.  They  may  have  been  in  the  place  of 
their  earlier  abode,  down  in  Massachusetts  and  Connecti- 
cut, a  bit  rebellious,  a  little  hard  to  manage.  I  have  read 
something  to  that  effect,  but  as  that  charge  was  justly 
made  against  the  Puritans  themselves  it  only  adds  to  the 
interest  of  whatever  our  fathers  did.  They  spread  out 
through  the  forest  to  the  North  and  toward  Lake  Cham- 
plain,  taking  title  to  their  lands  from  Benning  Went- 
worth,  of  New  Hampshire.  They  had  scarcely  cleared 
the  forest  and  built  their  cabins  when  the  office-holding 
landgrabbers  of  New  York,  an  enemy  more  dangerous 
than  the  Indian,  descended  upon  them.  They  resisted,  of 
course,  and  their  resistance  was  both  effective  and  pic- 
turesque. In  the  midst  of  this  struggle  for  their  homes 
came  the  fight  at  Lexington  and  at  Concord,  following 
years  of  more  or  less  open  rebellion  in  the  Colonies. 

In  that  hour  of  confusion  and  disorganization  and 
doubt,  out  of  the  North,  from  what  then  seemed  almost 
No-man's  Land,  came  the  first  clear,  aggressive  note  of 
defiance  and  of  victory. 

Three  weeks  after  the  * '  embattled  Farmers '  '  had  stood 

"By  the  rude  bridge  that  arched  the  flood, 
******* 
And  fired  the  shot  heard  'round  the  world" 

Ethan  Allen  and  his  little  band  of  Green  Mountain  Boys 
electrified  the  Colonies  by  taking  possession  of  all  this 
frontier  in  the  name  of  the  Continental  Congress.  Allen 
claimed  that  day  to  hold  two  commissions,  one  from  Je- 


1804 — 1904  Centennial  Oration  371 

hovah  and  one  from  the  Continental  Congress.  Wood- 
row  Wilson  says  that  he  held  neither.  It  is  certain  that 
he  did  not  hold  the  latter;  but  history,  more  veracious 
than  "A  History  of  the  American  People,"  has  since 
made  his  claim  to  the  former  reasonably  good.  This  was 
the  first  victory  of  the  Revolution ;  it  was  the  first  aggres- 
sive act  of  war;  the  first  time  that  Colonists  assumed  the 
offensive  and  attacked  the  Crown.  Senator  Hoar  in  his 
"Autobiography  of  Seventy  Years"  says  that  John  But- 
trick 's  order  to  fire  was  given  to  British  subjects,  but  it 
was  obeyed  by  American  citizens. 

The  men  who  crept  at  daybreak  under  the  walls  of 
Ticonderoga,  struck  down  a  British  sentinel,  demanded 
that  the  British  colors  be  lowered,  and  actually  lowered 
them,  demanded  and  received  the  surrender  of  the  troops 
of  his  Majesty,  King  George  III.,  were  certainly  no  longer 
British  subjects,  neither  were  they  American  citizens. 
They  were,  as  yet,  not  even  Vermonters;  they  were  just 
rebels  without  a  government  and  almost  without  a  coun- 
try. That  they  were  rebels  probably  disturbed  them  less 
than  a  like  status  disturbed  the  Colonists.  They  were 
used  to  it.  They  had  been  in  open  rebellion  against  New 
York  for  years,  and  Allen  and,  indeed,  most  of  their  dis- 
tinguished citizens,  had  been  branded  as  felons  by  that 
State. 

The  Declaration  of  Independence  by  the  Colonists  at 
Philadelphia  in  1776  was  followed  with  a  declaration  of 
independence  by  Vermont,  which,  in  its  way,  was  quite 
as  great.  There  were  thirteen  Colonies,  the  smallest  of 
which  was  more  populous  and  wealthy  than  Vermont. 
The  men  of  Vermont  stood  alone,  without  so  much  as  a 
clear  title  to  their  homes,  without  right  to  representation 
in  Congress  or  protection  against  attack,  on  the  extreme 
frontier  in  the  very  track  of  invasion;  yet  they  met,  de- 
clared themselves  an  independent  State  and  adopted  a 


372  Other  Addresses 

fundamental  law,  which  in  its  sanity,  its  declaration 
against  slavery,  its  provision  for  public  education,  up  to 
and  including  the  University,  is  unique  and  will  forever 
hold  an  honorable  place  in  the  history  of  the  development 
of  nations.  On  that  foundation  they  organized  a  Com- 
monwealth which  preserved  its  autonomy  for  fourteen 
years. 

Bennington,  in  1777,  where  again  the  men  from  the 
Green  Mountains  bore  so  distinguished  a  part,  was  to  the 
struggling  Colonies  almost  like  another  Ticonderoga. 
Indeed,  there  was  no  hour  in  that  seven  years*  fight  when 
Vermont  was  less  desperately  involved  than  the  Colonies 
themselves.  Yet,  when  the  war  was  over,  Vermont  was 
denied  the  fruits  of  the  common  victory.  She  was  not 
only  denied  the  fruits  of  the  victory  she  had  helped 
to  win,  but  plans  were  perfected  to  dispose  of  her  as 
Europe  disposed  of  Poland.  She  pleaded  long  in  vain; 
she  sent  appeals  to  Congress,  to  the  people  of  the  United 
States,  and  to  the  Colonies,  separately.  The  people  heard 
and  understood  her.  They  were  pioneers,  too,  and  they 
knew  for  what  Vermont  was  pleading ;  they  knew  what  it 
meant  to  conquer  homes  in  a  land  "filled  with  savages, 
scorpions  and  beasts  of  prey",  as  one  of  these  public 
appeals  put  it.  When  Ira  Allen  laid  the  plan  and  Thomas 
Chittenden  called  on  the  contiguous  territory  for  help, 
that  territory  responded  with  open  rebellion  against  their 
own  States.  Here  the  Founder  of  this  University  rendered 
his  greatest  service  to  the  State.  He  drove  off  the  wolves 
that  would  have  dismembered  Vermont;  he  saved  her 
from  the  enticing  offers  of  Great  Britain,  and  finally 
placed  her  in  the  galaxy  of  States. 

In  scrutinizing,  therefore,  the  figures  in  the  group 
representing  our  heroic  age,  the  eye  naturally  rests  first 
on  Ira  Allen.  We  are  proud  of  the  other  Aliens,  of 
the  Chittendens,  the  Warners,  the  Bakers,  the  Fays  and 


1804—1904  Centennial  Oration  373 

the  Robinsons,  but  Ira  Allen  not  only  served  the  State 
brilliantly — saved  the  State  probably — but  he  finally  put 
into  definite  form  in  this  University  the  ideas  of  human 
freedom  and  higher  education  which  actuated  all  the  men 
of  that  time.  No  college  in  all  the  hundreds  now  existing 
in  the  United  States  sprang  from  finer  seed. 

In  this  audience  proper  is  a  little  handful  of  men  who 
attended  that  first  great  festival.  They  saw  and  talked 
with  the  three  survivors  of  the  Class  of  1804.  By  touch  and 
sight,  therefore,  the  visible  part  of  this  audience  has  been 
in  direct  contact  with  the  Eighteenth  Century;  with  the 
time  of  Vermont's  admission  into  the  Union;  with  the 
period  of  Vermont's  independence;  with  the  date  of  the 
College  Charter;  almost  with  the  date  when  the  idea  of 
this  University  first  found  a  place  in  the  Constitution 
of  1777. 

To  the  men  who  saw  it,  that  first  Jubilee  is  a  reality 
still ;  to  us  who  did  not  see  it,  it  is  to-day  no  less  a  reality. 
Its  spirit  is  here.  The  men  who  made  that  occasion 
memorable  are  here  in  our  larger  audience.  Let  us  call 
some  of  them  forth. 

On  more  than  one  occasion  during  that  festival,  Jacob 
Collamer  presided.  Jacob  Collamer!  A  name  that  sug- 
gests the  dignity  of  Jove ;  a  fame  of  like  quality.  On  the 
Committee  having  the  celebration  in  charge  was  Henry 
J.  Raymond,  that  brilliant  son,  whose  like,  I  fear,  our 
half-century  cannot  show!  George  Wyllis  Benedict  was 
there  and  made  an  address.  George  Wyllis  Benedict! 
who,  as  a  young  man,  found  the  University  homeless  and 
almost  penniless;  who,  nevertheless,  gave  a  service  so 
fine  that  it  has  placed  him  amongst  our  Immortals ;  by  his 
personal  service  and  the  service  and  loyalty  of  his  sons 
and  grandsons  he  is  in  every  page  of  our  history  since 
1825.  Frederick  Billings  signed  a  telegram  of  congratu- 
lation from  California  to  the  Committee  in  charge.  Fred- 


374  Other  Addresses 

erick  Billings!  the  great  pioneer,  the  empire  builder,  the 
princely  benefactor! 

Of  the  leading  addresses  on  that  memorable  occasion 
College  fame  declares  that  the  "Historical  Discourse"  of 
Ex-President  Wheeler  is  one  of  the  great  documents  of 
the  University,  and  that  the  Oration  by  James  R.  Spalding 
was  one  of  the  finest  utterances  of  philosophical  radicalism 
ever  pronounced  on  any  academic  occasion. 

The  students  of  that  day  are  in  our  larger  audience 
also— and  what  men  they  were!  McKendree  Petty  was 
then  a  tutor,  having  graduated  five  years  before;  in  him 
dwelt  some  of  the  great  qualities  of  Mark  Hopkins.  Some- 
thing of  him  is  in  many  of  us,  and  for  that,  as  well  as  our 
Vermont  birthright,  we  are  thankful.  Matthew  Hale  had 
graduated  only  three  years  earlier,  and  Henry  Augustus 
Pierson  Torrey  entered  College  the  following  Autumn. 
Early  or  late,  there  are  no  finer  names  than  these,  no 
stronger,  no  gentler,  no  wiser  men.  May  I  add, — though 
I  am  not  supposed  to  speak  of  the  living — that  the  period 
also  produced  Matthew  Henry  Buckham,  John  Ellsworth 
Goodrich,  John  Heman  Converse,  and  others  of  like 
quality. 

Other  names  appear,  of  such  distinction  that  the  cele- 
bration seems  an  event  of  a  quality  not  likely  ever  to  be 
surpassed  in  the  history  of  the  University. 

The  Rev.  Jno.  Wheeler  in  his  excellent  historical  ad- 
dress on  that  occasion  dwelt  on  the  danger  of  frequent 
changes  in  the  administration  of  a  college.  In  our  first 
half-century  we  suffered  on  that  account.  But  in  our 
second  half-century  we  have  been  blessed,  indeed  almost 
distinguished,  by  the  length  of  service  of  certain  men, 
and  by  an  administration  which,  in  some  sense,  compre- 
hends the  entire  period. 

These  names  so  cover  the  last  fifty  years,  and  have 
throughout  wrought  in  such  harmony  that  they  take  on 


1804—1904  Centennial  Oration  375 

the  force  and  the  majesty  of  a  clear  purpose  that  goes 
direct  toward  a  goal:  Torrey,  Petty,  Barbour,  Perkins, 
Emerson,  Goodrich,  Buckham. 

Quite  two-thirds  of  our  half-century  is  technically 
comprehended  in  the  administration  which  to-day  directs 
the  fortunes  of  the  College.  From  it  the  greater  number 
of  this  audience  got  their  training.  It  began  nominally 
in  1871,  but  its  spirit  was  in  the  College  during  the  bril- 
liant administration  of  President  Angell;  it  was  develop- 
ing during  the  Civil  War;  it  was  at  work  when  Senator 
Morrill  secured  for  the  University  a  second  foundation; 
indeed,  it  took  its  beginning  in  the  heart  and  character 
and  mind  of  a  student  who  graduated  three  years  before 
that  first  Jubilee.  From  1847  to  1904 — fifty-seven  years — 
there  has  been  no  hour  when  the  University  of  Vermont 
has  not  been  the  hope,  the  ambition  and,  for  forty-seven 
years,  the  care  of  Matthew  Henry  Buckham.  I  know  of 
no  parallel  to  this  length  of  service  in  any  American  col- 
lege. In  addition,  apply  what  test  you  like  to  the  Uni- 
versity to-day ;  apply  the  same  test  to  the  University  as  it 
was  in  1854;  then  measure  the  advance, — estimate  the 
achievement!  In  his  presence  I  am  not  permitted  to  say 
what  I  would,  but  as  I  know  of  no  longer,  so  I  am  bound 
to  say  I  know  of  no  finer,  service.  I  know  of  no  broader 
administration;  this  has  kept  the  institution  modern.  I 
know  of  no  administration  with  higher  ideals;  this  has 
kept  the  institution  sound.  I  know  of  no  serener  courage, 
— courage  that  has  labored  on  when  days  were  drear  and 
the  outlook  gloomy. 

The  administration  of  President  Buckham  has  secured 
for  the  College  about  all  its  buildings,  substantially  all  its 
equipment,  and  all  its  permanent  funds  derived  from 
voluntary  contributions.  It  has  brought,  not  only  the 
usual  college  course,  but  the  instruction  planned  by 
Senator  Morrill,  close  to  the  people  of  the  State.  It  has 


376  Other  Addresses 

increased  the  number  of  students  five  fold.  It  has  given, 
perhaps,  the  most  distinguished  example  of  co-education 
in  higher  education.  The  Medical  College,  after  a  period 
of  striking  success  and  steady  advancement  in  its 
standards,  has  finally  been  made  a  College  in  the  Uni- 
versity. All  the  departments  that  seem  strange  and  very 
modern  to  many  of  us  have  grown  up  within  this  period, 
and  a  course  of  study  determined  largely  by  the  students ' 
election  has  been  tested  as  fully,  perhaps,  as  in  any  college 
in  the  land. 

The  nearer  we  get  to  the  present  the  more  effective 
the  administration  of  the  University  becomes,  and  it  is 
no  exaggeration  to  say  that  the  last  twenty-five  years 
has  seen  more  accomplished  in  matters  which  insure  the 
perpetuity  of  the  University,  than  was  accomplished  in 
the  previous  seventy-five  years. 

Men  live  again  in  their  children.  The  immortality 
that  comes  to  men  through  children  is  as  certain  as  any- 
thing we  know.  The  birth  of  a  butterfly  symbolizes  the 
beginning  of  the  life  Eternal,  but  the  birth  of  a  child 
takes  Immortality  out  of  the  realm  of  speculation  and 
dogma.  Institutions  play  the  same  part  in  the  life  of 
ideas,  principles  and  men.  The  ideas  and  the  men  of 
1804,  the  ideas  and  the  men  of  1854,  are  a  living  force  in 
the  University  and  in  us.  We  are  here  to  acknowledge 
this  and  humbly  to  pledge  an  honest  effort  to  maintain 
the  standards  and  the  faith  of  the  Fathers.  To  our  Saints 
and  Heroes,— to  the  men  of  1777,  of  1791,  of  1804,  of  1854, 
we  offer  the  homage  which,  in  the  East,  has  become  a 
religion.  We  proudly  claim  from  them  our  blood,  our 
beliefs,  our  history,  our  traditions, — even  our  supersti- 
tions. To  the  little  band  who  were  participants  in  that 
first  Jubilee,  who  take  us  by  elbow  touch  to  the  very 
birth-hour  of  the  University,  we  uncover.  Across  the 
intervening  years,  down  the  long  line  stretching  back 


1804—1904  Centennial  Oration  377 

through  the  century,  we  hail  all  others,  living  or  dead, 
whose  virtues  are  enshrined  in  this  Institution  and  per- 
petuated in  the  good  learning  and  sound  manhood  of  the 
Nation. 

With  them  we  turn  our  faces  toward  the  future. 

A  PROSPECT. 

Pacing  the  problems  of  the  hour  and  of  the  future,  the 
University  of  Vermont  has  points  of  surpassing  strength. 
She  has,  first  of  all,  the  strength  of  unselfishness.  No  college 
for  a  century  has  given,  more  continuously,  to  the  world  and 
received  from  outside  less  in  return.  It  has  been  the  unique 
mission  of  this  Institution,  and  of  this  State,  to  produce 
men  of  unusual  moral  fibre,  endow  them  here  with  a  higher- 
education,  and  then  send  them  out  to  build  other  common- 
wealths and  found  other  colleges. 

The  University  has  also  the  strength  that  comes  from 
the  rare  quality  of  the  youth  who  seek  her  tutelage. 

No  one  has  drawn  the  picture  of  a  Vermont  home, 
from  this  view-point,  better  than  McLaren  in  his  Story  of 
George  Howe.  He  sfeys: 

"There  was  just  a  single  ambition  in  these  humble 
"homes,  to  have  one  of  its  members  at  college,  and  if 
"Domsie  approved  a  lad,  then  his  brothers  and  sisters 
' '  would  give  their  wages,  and  the  family  would  live  on 
' '  skim  milk  and  oat  cake,  to  let  him  have  his  chance. ' ' 

George  Howe  has  entered  this  College  and  graduated 
from  it  many  times.  Such  homes  are  scattered  all 
through  these  green  hills.  The  spirit  of  that  Scotch 
family  surrounded  the  early  youth  of  many  of  the  boys 
and  girls  who  have  passed  this  way  on  their  journey  to 
manhood  and  womanhood  and  distinction. 

This  fact  was  also  in  my  mind  when  I  said  a  moment 


378  Other  Addresses 

ago  that  no  college  in  all  the  land  sprang  from  finer  seed; 
and  I  now  add,  no  other  college  in  the  land  has  such  ma- 
terial to  work  on  to-day. 

The  graduate  of  this  University  should  quickly  be- 
come a  man  who  is  felt.  He  has  a  way  of  looking  the 
world  squarely  in  the  eye,  and  he  isn't  afraid.  He  doesn't 
know  how  to  be  afraid — doesn't  know  enough  of  the 
things  that  make  other  men  timid.  He  hasn  't  been  spoiled 
by  the  pressure  of  the  mob.  He  doesn't  waste  time  on 
the  artificialities  of  life,  on  which  most  men  fritter  away 
their  strength;  he  goes  direct  to  the  matter,  straight  to 
the  heart  of  accomplishment.  He  expects  to  work.  He 
knows  how. 

The  quality  of  leadership  is  in  the  very  soul  of  such 
boys.  They  are  clear-eyed,  deep-chested.  They  instinc- 
tively use  the  Bismarckian  theory  of  diplomacy  and  tell 
the  truth.  They  may  have  few  of  the  so-called  graces  of 
life,  they  may  be  to  the  world  a  little  uncouth  at  first,  but 
they  usually  take  possession  of  the  world  while  it  is  smil- 
ing at  them.  They  become  leaders  by  sheer  moral  force 
and  intellectual  integrity. 

If  the  history  of  her  first  century  is  to  be  in  so  far 
repeated,  and  it  probably  will  be,  this  University  will 
continue  giving,  she  will  continue  to  send  forth  to  other 
States  a  very  large  part  of  her  own  product,  a  consider- 
able measure  of  the  very  substance  of  the  State. 

Happily  the  larger  world  into  which  our  men  must  go 
is  calling  for  them  loudly  just  now.  There  is  work  to  do. 
There  are  new  careers  waiting;  waiting  for  men  who  are 
strong  enough  to  meet  extraordinary  requirements. 

What  that  work  is,  what  those  careers  may  be,  let  us 
consider. 

I  have  said  there  are  new  careers.  This  implies  the 
judgment  that  the  learned  professions  no  longer  offer  the 
highest  and  best  opportunity  to  the  scholar. 


1804 — 1904  Centemial  Oration  379 

For  to-day,  and  for  as  much  of  the  future  as  may  be 
included  in  a  modest  forecast,  the  largest  opportunities  in 
this  country  are  not  in  the  professions  and,  in  my  judg- 
ment, will  not  be  again  soon,  if  ever.  The  great  oppor- 
tunities,— the  very  great  careers  of  the  future,  are  in 
what,  from  lack  of  a  better  name,  I  call  business. 

In  society  as  it  existed  in  the  Colonies  and  for  nearly 
a  century  later,  the  place  of  the  professions  was  unchal- 
lenged and  unchallengeable;  but  a  change  has  come,  lat- 
terly a  challenge  has  gone  forth  and  a  trial  of  strength 
has  been  had  which,  while  it  has  not  shown  any  real 
degeneration  in  the  professions,  has  shown  the  existence 
of  new  conditions,  offering  careers  more  brilliant,  more 
useful,  and  more  satisfying. 

The  currents  of  life  have  shifted  and  opportunity,  as 
a  result,  lies  in  somewhat  strange  fields.  As  life  has 
changed  types  have  changed.  Certain  qualities  that  were 
supposed  to  be  the  peculiar  property  of  the  professions 
have  strayed  and  have  even  wonderfully  flourished  in 
new  environments. 

Iniative  and  real  leadership  have  decidedly  shifted 
their  habitat.  The  most  prophetic  as  well  as  powerful 
and  useful  type  of  citizen  in  our  civilization  has  come  to 
be  the  man  of  action,  the  man  of  affairs.  He  is  useful 
because  he  is  close  to  life  as  it  is,  he  is  powerful  because 
he  understands  life  as  it  is,  he  is  prophetic  because  he 
understands  something  of  life  as  it  is  to  be.  He  may  or 
may  not  have  been  in  the  professions  earlier.  He  may  or 
may  not  have  earned  a  degree.  His  learning  may  have 
come  from  books  or  from  men.  These  are  minor  con- 
siderations. His  problem  is  the  thing, — and  his  problem 
is  Life, — teeming,  quivering,  fighting  Life. 

The  power,  responsibility  and  character  of  men  of  this 
class  is  now  such  that  college-bred  men  will  seek  similar 
careers  hereafter  or  miss  the  highest  opportunity.  Such 


380  Other  Addresses 

careers,  moreover,  appeal  powerfully  to  the  College  Ideal, 
once  their  real  scope  is  understood. 

A  distinguished  divine  in  the  latter  half  of  the  Seven- 
teenth Century,  said  that  in  the  settlement  of  the  Colonies 
"God  sifted  a  whole  nation  that  He  might  send  choice 
grain  into  His  wilderness."  If  that  preacher  were  alive 
now  and  knew  the  story  of  the  last  one  hundred  years,  he 
would  realize  that  this  sifting  process  was  not  confined  to 
his  time  or  to  one  nation.  The  world  has  been  sifted  and 
is  being  sifted  for  ' '  choice  grain. ' '  We  have  built  a  nation 
by  the  strangest  process  ever  seen.  It  began  when  Ver- 
mont pointed  the  way  of  empire  in  1791.  It  has  gone  on 
until  the  Thirteen  Original  States  have  become  forty-five. 
In  the  entire  process,  if  we  except  the  happenings  in  con- 
nection with  the  Mexican  War,  we  can  fairly  state  that  no 
province  was  ravished,— nothing  of  the  usual  program  of 
nations  was  carried  out.  State  after  State  was  presented 
to  our  Republic  by  the  instinct  of  the  nations.  The  people 
rose  up  all  over  the  world ;  they  came  to  us.  We  did  not 
go  out  and  conquer  them. 

It  is  doubtful  if  there  is  anywhere  historically  a 
clearer  point  of  departure  than  that  which  marks  the 
establishment  of  the  independence  of  the  Thirteen  Colo- 
nies. This  arises  not  alone  from  the  fact  that  then  a 
nation  was  born, — nor  from  the  fact  that  certain  great 
principles  of  human  freedom  laid  down  in  the  Declaration 
of  Independence  were  then  embodied  in  the  Constitution, 
but  from  a  fact  which  becomes  clearer  as  our  develop- 
ment progresses.  The  millions  of  the  world  have  come  to 
us  not  altogether  because  they  believed  in  our  Constitution 
and  in  our  Institutions,  but  actuated  by  one  of  those  mys- 
terious impulses  which  have,  through  all  time,  resulted  in 
wonderful  movements  amongst  the  people,  without  any 
clear  knowledge  on  their  part  of  why  they  moved  or  what 
they  would  ultimately  achieve.  It  was  such  a  movement 


1804—1904  Centennial  Oration  381 

as,  in  the  development  of  the  earth,  submerged  continents 
and  raised  new  ones  from  the  deep.  The  people  wanted 
land;  they  wanted  to  escape  certain  institutions  which 
crushed  and  smothered ;  they  wanted  freedom  to  worship 
God  according  to  the  dictates  of  their  own  consciences ;  but 
down  underneath  they  wanted  something  more.  They 
wanted  a  new  civilization;  they  wanted  a  society  based 
on  a  readjustment  of  things,  based  on  such  conquest  of 
the  forces  of  nature  as  would  make  life  worth  while,  based 
on  the  doctrine  that  men  should  co-operate  with  and  not 
slay  each  other.  As  a  result,  about  every  ship  sailing  or 
steaming  westward,  since  Columbus  anchored  his  caravels 
off  San  Salvador,  has  carried  a  freight  of  humanity  full 
of  rebellion  against  what  was  behind, — full  of  hope  as  to 
the  new  world.  An  Englishman,  writing  anonymously, 
has  lately  briefed  the  story  and  stated  the  existing  con- 
dition from  the  European  point  of  view,  as  follows : 

"For  a  century  past  she  (America)  has  drawn  to  her- 
self, by  an  irresistible  attraction,  the  boldest,  the  most 
masterful,  the  most  practically  intelligent  of  the  spirits 
of  Europe ;  just  as  by  the  same  law  she  has  repelled  the 
sensitive,  the  contemplative,  and  the  devout.  Uncon- 
sciously, by  the  mere  fact  of  her  existence,  she  has  sifted 
the  nations.  The  children  of  the  spirit  have  slipped 
through  the  iron  net  of  her  destinies,  but  the  children  of 
the  world  she  has  gathered  into  her  granaries.  *  *  * 
Over  her  unencumbered  plains  the  genius  of  industry 
ranges  unchallenged,  naked,  unashamed.  *  *  *  En- 
dowed above  all  the  nations  of  the  world  with  intelli- 
gence, energy  and  force,— unhampered  by  the  splendid 
ruins  of  the  past  which,  however  great,  do  but  encum- 
ber in  the  old  world,  with  fears,  hesitations  and  regrets, 
the  difficult  march  to  the  promised  land  of  the  future, — 
combining  the  magnificent  enthusiasm  of  youth  with  the 
wariness  of  mature  years, — animated  by  a  confidence 


382  Other  Addresses 

almost  religious  in  their  own  destiny,  the  American  people 
are  called  upon,  it  would  seem,  to  determine  in  a  pre- 
eminent degree,  the  form  that  is  to  be  assumed  by  the 
society  of  the  future;  upon  them  hangs  the  fate  of  the 
Western  World." 

I  quote  this  because  it  is  the  usual  view  of  the  foreign 
critic,  and  of  some  of  our  own  household.  But  it  is 
neither  correct  nor  fair.  It  is  a  criticism  with  all  its  flat- 
tering admissions  planned  to  lead  to  a  certain  conclusion. 
It  is  born  of  a  desire  to  explain  away  a  part  of  our  suc- 
cess, of  a  purpose  to  show  that  we  are  surely  coming  to 
disaster  in  the  further  development  of  the  country. 

We  have  sifted  the  nations,  but  the  sifting  has  not 
been  that  generally  claimed  and  usually  admitted.  We 
have  done  more  than  attract  the  bold,  the  masterful,  the 
practically  intelligent.  The  enormous  energy  of  this 
country  is  not  so  much  the  result  of  power  assembled,  as 
of  power  evolved.  Humanity  has  here  developed  a  new 
capacity  for  work,  new  boldness  in  attempting  problems, 
new  ingenuity  in  utilizing  the  forces  of  nature.  So  swiftly 
has  this  gone  forward,  so  great  is  its  present  progress  that 
in  1920,  statisticians  tell  us,  the  mechanical  energy  of  this 
nation  will,  in  the  aggregate,  equal  the  mechanical  energy 
of  all  Europe  at  that  time,  with  three-fold  our  population. 
In  other  words,  we  are  within  reach  of  the  day  when,  in 
the  use  of  what  has  come  to  be  the  most  necessary  imple- 
ment of  commerce  and  progress,  every  American  will  be 
the  equal  of  three  Europeans. 

We  have  sifted  the  nations,  but  with  the  bold,  the 
masterful  and  the  intelligent  we  have  attracted  the  gen- 
tle, the  devout,  the  contemplative.  Indeed,  these  qualities 
usually  go  together,  if  either  is  to  be  of  use  to  the  world. 
Such  a  segregation  as  this  critic  claims  might  or  might 
not  portend  trouble  for  us,  but  it  would  leave  a  lot  of 


1804—1904  Centennial  Oration  383 

weaklings  in  Europe — who  with  all  devotion  and  gentle- 
ness would  necessarily  be  impotent. 

The  bold  spirit  is  usually  gentle;  the  intelligent  man 
is,  in  its  proper  sense,  devout ;  the  masterful  man  usually 
has  ideals  to  the  furtherance  of  which  he  bends  other 
men's  wills. 

We  have  taken  fully  as  much  spirituality  as  force 
from  Europe. 

Under  a  program,  which  for  the  first  time  com- 
pletely unshackled  industry,  resulting  in  unprecedented 
business  activity,  the  qualities  which  are  supposed  to 
adorn  a  ripened  civilization  have  not  as  yet  greatly  as- 
serted themselves;  spiritual  evolution  has  naturally  not 
advanced  as  rapidly  as  has  the  evolution  of  energy  and 
industry.  But  the  Civil  War  tells  whether  sacrifice  for 
principle  is  still  possible,  and  the  Spanish  War  records 
an  act  in  defence  of  the  oppressed  so  quixotic  that  Europe 
has  only  just  begun  to  accept  its  good  faith. 

That  we  should  have  in  us  a  spirit  of  sacrifice  that 
does  not  calculate  the  cost,  and  capacity  on  occasion  for 
almost  fanatical  devotion  to  principle,  is  not  strange. 

There  has  been  that  in  all  our  history  which  has 
appealed  to  the  lovers  of  peace  and  justice  and  spiritual 
liberty  even  more  powerfully  than  other  qualities  have 
appealed  to  the  restless  and  the  adventurous. 

The  outburst  of  physical  force  which  followed  the 
complete  opportunity  presented  here  has  so  bewildered 
and  amazed  the  Old  World  that  it  does  not  see  the  other 
side  of  our  development,  and  does  not  understand  that  in 
the  fulness  of  time  the  work  of  the  children  of  the  spirit 
promises  to  be  even  more  wonderful  than  the  work  of  the 
children  of  the  world.  By  way  of  forecast  let  us  note  in 
contrast  a  few  familiar  conditions. 

Europe  was  never  so  nearly  an  armed  camp  as  it  is 
to-day.  The  conditions  which  formerly  made  a  man 


384  Other  Addresses 

spend  the  best  years  of  his  life  preparing  to  cut  his  neigh- 
bor's throat  still  persist.  The  old  institutions  still  call 
for  a  dole  of  blood.  Here  civilization  is  built  on  lines 
which  utilize  every  power  of  society  in  production;  in- 
dustry is  indeed  "unashamed",  and  has  taken  not  merely 
a  new,  but  the  leading  place. 

We  are  said  to  have  attracted  the  masterful  and  re- 
pelled the  sensitive.  Then  it  would  appear  that  the  mas- 
terful love  peace  and  the  sensitive  desire  war;  that  the 
bold  build  up  and  the  devout  destroy. 

Here  is  a  civilization  based  on  production;  there  is  a 
society  in  which  about  every  energy  is  exhausted  in 
preparation  for  destruction. 

For  example,  a  hundred  tons  of  steel  is  there  cast 
into  a  great  gun;  here  it  is  fashioned  into  a  locomotive. 
Does  the  gun  represent  spirituality  and  does  the  locomo- 
tive represent  only  force?  Or  does  the  gun  represent 
privilege  and  a  denial  of  human  rights,  and  the  locomo- 
tive represent  human  hope  and  human  comfort  and  a 
distinct  victory  over  natural  forces  that  otherwise  shrivel 
the  spirit?  By  some  perversion  of  logic,  the  instrument 
of  destruction  is  supposed  to  be  in  harmony  with  the 
spirit  of  art,  with  the  love  of  beauty, — while  the  engine 
of  production  is  held  to  be  without  appeal  to  such  senti- 
ments. 

A  billion  dollars  spent  on  a  standing  army,  the  argu- 
ment is,  does  not  interfere  with  the  spirit  of  contempla- 
tion; but  a  billion  dollars  in  an  industrial  corporation  is 
degrading  and  kills  all  spiritual  power. 

Nothing  is  clearer  than  this:  Every  condition  of  ma- 
terial superiority  here,  which  Europe  is  compelled  to 
admit,  is  equally  big  with  spiritual  promise,  inherent 
promise,  promise  of  a  higher  type  than  any  previous  civi- 
lization can  show.  We  cannot  fairly  be  charged  with  any 
lack  of  appreciation  of  our  material  successes,  but  we  are 


1804—1904  Centennial  Oration  385 

fairly  chargeable  with  a  lack  of  appreciation  of  our 
spiritual  power  and  possibilities.  In  these  matters  we 
are  disposed  to  feel  humble  if  reference  is  made  to  an- 
tiquity or  to  Europe;  it  is  usual  for  us  to  become  apolo- 
getic. This  attitude  is  not  only  demoralizing  but  unjust. 
It  is  time  we  stopped  apologizing.  To  the  jibe  contained 
in  the  claim  that  we  have  "repelled  the  sensitive,  the 
contemplative  and  the  devout, "  we  may  well  answer  that 
if  Europe  and  our  forebears  generally  had  done  their 
work  better  we  would  have  more  leisure  now  for  contem- 
plation and  devotion.  The  amazing  thing  is  not  that  in 
certain  extreme  instances  they  surpass  us,  but  that  they 
have  in  six  thousand  years — or  is  it  six  million? — done 
so  little  that  is  permanent  and  worth  while,  left  us  so 
near  the  earth,  so  bound  to  the  soil,  so  much  the  prey  of 
disease  and  war  and  superstition. 

Every  previous  civilization  has  flowered  too  soon. 
That  is  not  a  good  civilization  which  creates  a  Winged 
Victory  or  a  Venus  of  Melos  and  leaves  the  people  gener- 
ally little  better  than  savages.  That  is  not  a  good  type 
of  civilization  which  produces  wonderful  pictures  and 
leaves  the  masses  without  opportunity  or  disposition  to 
understand  them. 

The  writer,  whom  I  have  just  quoted,  after  pointing 
out  the  material  we  have  in  hand  and  the  power  it  gives 
us,  wonders  what  the  final  result  will  be  after  this 
fashion : 

"Is  that  which  created  the  religion,  the  art,  the  specu- 
lation of  the  Past;  that  insatiable  hunger  for  Eternity 
which  *  *  has  luxuriated  in  the  jungle  of  Hindoo 
myths,  blossomed  in  the  Pantheon  of  the  Greeks,  suffered 
on  the  cross,  perished  at  the  stake,  wasted  in  the  cloister 
and  the  cell,  which  has  given  life  to  marble,  substance  to 
color,  structure  to  fugitive  sound,  which  has  fashioned  a 
palace  of  fire  and  cloud  to  inhabit  for  its  desire,  and 


386  Other  Addresses 

deemed  it,  for  its  beauty,  more  dear  and  more  real  than 
kingdoms  of  iron  and  gold ; — is  that  hunger,  in  the  future 
as  in  the  past,  to  harass  and  hunt  us  from  our  styes  ? ' ' 

Here  we  have  the  conclusion  which  follows  naturally 
from  the  claim  that  we  are  lacking  in  spirituality.  Here 
is  the  suggestion  that  a  civilization  so  gross  cannot  be 
expected  to  blossom  with  religious  fervor  or  the  spirit  of 
sacrifice. 

Putting  aside  the  question  of  whether  we  have  at- 
tracted spiritual  power,  or  have  developed  it,  what  do 
contrasted  conditions  again  show?  Is  a  "hunger  for 
Eternity"  unlikely  to  flourish  in  a  vast  country  so  highly 
organized  that  it  is  to  some  of  the  countries  of  Europe  as 
the  vertebrate  to  the  mollusk?  Do  physical  decency  and 
comfort  fight  against  the  soul?  Is  a  hut  with  contempla- 
tion and  vermin  better  for  spiritual  development  than  a 
modern  home  with  bath-rooms,  sunshine  and  sound  rules 
of  hygiene?  Will  people  develop  a  less  exalted  concep- 
tion of  the  hereafter  under  a  programme  that  stands 
every  man  on  his  own  feet,  faces  him  with  his  own  respon- 
sibilities, and  makes  him  do  justice  if  he  expects  to  re- 
ceive it?  Does  the  picture  of  a  million  men  under  arms 
appeal  to  the  soul  more  powerfully  than  the  spectacle  of 
a  million  men  at  work? 

Is  there  more  poetry  in  the  construction  of  a  battle- 
ship than  in  the  construction  of  a  great  steel  bridge  ? 

If  art  has  flourished  in  a  society  made  up  of  special 
privilege  at  one  end  and  ignorance  and  fear  at  the  other, 
is  it  less  likely  to  flourish  in  a  society  from  which  both 
privilege  and  fear  have  been  largely  banished?  in  which 
fierce  competition  constantly  spurs  ability  to  do  its  best? 

It  is  true  that  going  so  directly  to  the  root  of  the 
problem,  undertaking  changes  in  society  so  radical,  re- 
versing the  whole  point  of  view,  putting  industry  at  the 
front  and  not  under  foot,  has  resulted  in  numberless 


1804—1904  Centennial  Oration  387 

temporary  conditions  onto  which  the  critics  with  some 
justification  pounce  for  evidence  that  we  are  to  fail  in 
our  vast  undertaking.  Some  of  these  conditions  are 
serious;  some  shock  and  disturb  even  those  of  us  who 
believe  in  the  complete  triumph  of  our  plan.  For  ex- 
ample : 

We  are  governed  by  bosses.  Our  best  men  generally 
avoid  politics  and  our  worst  men  seek  it.  Municipal  gov- 
ernment is  generally  an  orgy  of  " graft/'  Lately  our 
greatest  city  deliberately  rejected  decency  in  its  govern- 
ment and  invited  the  most  notorious  organization  in  the 
world  back  to  power.  Our  press  is  yellow  and  largely  a 
pander.  Churches  are  not  half  filled  on  Sunday.  Some 
of  our  college  graduates  can  neither  spell,  write  nor 
speak  the  English  language  correctly.  Our  children  are 
frequently  ill-bred.  Our  tastes  in  music  have  turned  the 
organ  and  piano  into  mechanical  monsters.  We  do  every- 
thing in  a  rush.  We  do  only  a  few  things  very  well.  All 
our  standards  relate  back  in  some  fashion  to  the  dollar. 
Our  cities  are  architectural  monstrosities.  We  have  no 
longer  a  literature  worthy  the  name.  The  theatre  has 
become  vulgar  where  it  is  not  dirty,  and  vaudeville  pays 
better  than  Shakespeare.  Lately  we  have  been  told  that 
the  man  whose  virtues  I  am  extolling,  the  business  man, 
is  the  father  of  all  systems  of  " graft". 

Just  recently,  too,  no  less  a  personage  than  Dr.  Faunce, 
of  Brown  University,  delivered  this  criticism:  "We  are 
a  people  of  quick  perception,  sensitive  temperament,  swift 
to  respond  to  our  environment,  and  with  peculiar  versa- 
tility in  resource.  Yet  we  still  stand  outside  the  realm  of 
ripened  wisdom  and  assured  and  stable  conviction." 

All  true  enough,  and  all  false  enough,  but  the  expression 
of  a  superficial  and  an  unsympathetic  view.  The  man  who 
sees  no  deeper  than  these  criticisms  take  us,  does  not  under- 
stand the  age. 


388  Other  Addresses 

That  "insatiable  hunger  for  Eternity"  is  here,  but  it 
also  has  changed  its  habitat.  It  dwells  elsewhere  as  well 
as  in  the  learned  professions.  Strangely  enough  its  chief 
representative  and  hope  is  again  the  man  of  action.  He 
has  not  only  organized  force,  but  in  that  organization  he 
has  preserved  and  somewhat  developed  spirituality — at  a 
time  when  the  astigmatism  of  the  critics  makes  spiritu- 
ality seem  to  be  waning.  The  seed  sifted  from  all  the 
world  to  be  planted  in  this  wilderness  has  progressed  so 
far  toward  spiritual  as  well  as  material  fruition,— the  plan 
of  civilization  that  will  finally  be  worked  out  here  has 
been  so  far  sketched,  that  the  dominant  figure,  for  this 
generation  at  least,  emerges.  That  figure  is  the  man  of 
affairs.  Let  us  look  at  him  a  moment. 

He  is  the  product  as  well  as  the  master  of  the  age. 

In  him  are  the  statesmanship  and  learning,  the  good 
breeding  and  love  of  art,  the  poetic  feeling  and  phil- 
osophy, the  philanthropy  and  the  longing  for  Eternity 
which  the  critic  and  the  pessimist  insist  have  departed 
from  us,  or  from  the  beginning  have  avoided  us.  This 
modern  man  of  affairs  is  many  sided.  That  he  does  things 
is  beyond  discussion;  but  many  of  us  yet  fail  to  realize 
all  that  he  does.  In  him  is  the  spirit  that  drew  millions 
out  of  Europe,  and  in  him  is  the  hope  that  brought  them 
hither.  He  is  master  in  a  land  where  Industry  is  honor- 
able, where  for  the  first  time  it  is  really  no  disgrace  to 
work;  where  a  man  of  leisure  is  more  apt  to  be  a  loafer 
than  a  gentleman.  What  the  instinct  of  the  people  felt 
for  a  thousand  years  he  has  crystallized  into  definite 
plans.  Better  than  any  other  type  he  has  understood  the 
unconscious  determination  of  the  world  to  build  here  on 
new  and  radical  lines. 

This  leadership  of  the  man  of  affairs  has  amongst 
other  things  made  him  a  statesman.  Statecraft  with  us 
has  come  to  be  made  up  largely  of  questions  of  commerce, 


1804—1904  Centennial  Oration  389 

in  which  business  is  naturally  dominant.  The  old  style 
Senator — pompous,  oratorical,  diffuse — has  nearly  disap- 
peared. The  Senator  or  Congressman  who  shapes  legisla- 
tion is  either  a  business  man  or  he  uses  the  business  man's 
methods.  There  is  very  little  buncombe  about  Congress 
by  contrast  with  its  earlier  qualities,  and  there  is  very 
little  ground  for  the  outcry  sometimes  made  against  the 
dominance  of  this  new  type.  The  standards  at  Washington 
have  been  lifted  to  a  new  and  higher  level  by  the  man  of 
affairs.  His  view  is  broader  than  nationality.  He  is 
wiser  than  any  Foreign  Office.  His  fingers  are  on  the 
pulse  of  the  world. 

He  is  also  a  philosopher.  In  all  our  fierce  style  of  life 
no  man  is  nearer  the  heart  of  things.  He  not  only  sees 
but  he  guides  the  forces  at  work.  He  studies  the  problem 
from  all  sides,  as  Shylock  did  when  considering  the  loan 
to  Antonio.  He  knows,  as  Shylock  did  not,  that  "  Ships 
are  but  boards,  sailors  but  men.  There  be  land  rats  and 
water  rats;  land  thieves  and  water  thieves."  His  phil- 
osophy has  taught  him  how  to  avoid  most  of  the  hazards 
which  ruined  Antonio.  He  studies  organization,  and 
organization  involves  the  whole  philosophy  of  human 
progress. 

Our  business  man  is  a  philanthropist.  He  has  come 
to  do  what  the  King  formerly  did.  He  founds  hospitals, 
endows  schools,  builds  churches,  makes  learning  and 
books  free.  He  makes  money  but  he  knows  what  money 
is  worth. 

Our  business  man  is  a  poet.  Poetry  has  found  expres- 
sion in  various  forms:  sometimes  in  language;  sometimes 
in  harmony  of  sound;  sometimes  in  stone;  sometimes  in 
color;  but  true  poetry  is  always  the  same: — it  is  a  lamp 
that  leads  forward,  a  glimpse  of  new  truth,  an  appeal,  a 
longing,  a  height  that  beckons,  a  better  revelation.  There 
is  poetry  in  business,  and  our  business  man  recognizes 


390  Other  Addresses 

that.  He  gets  the  view  of  the  prophet  and  poet  while 
attending  to  business.  He  does  not  merely  hope  for  the 
elevation  of  the  race;  he  does  not  simply  pray  for  it;  but 
he  does,  with  his  own  hands,  that  which  forwards  it,  and 
he  studies  with  wonder  and  awe  and  delight  the  social 
and  political  forces  working  under  his  fingers.  He  con- 
solidates the  industries  of  a  continent  and  then  introduces 
profit-sharing.  He  knows  the  poetry  as  well  as  the  ma- 
chinery that  underlie  and  uplift  the  status  of  those  who 
toil. 

Our  business  man  is  a  prophet.  He  does  not  adopt  a 
strange  dress  and  fast  and  wander  in  the  desert.  He 
probably  has  a  yacht  and  an  automobile,  but  he  is  a 
prophet  none  the  less.  A  leathern  girdle  would  not  suit 
him  for  raiment;  neither  would  locusts  and  wild  honey 
answer  for  his  diet.  He  takes  civilization  by  the  throat  and 
remakes  it  while  you  wait;  he  prophesies  in  one  breath 
and  fulfils  the  prophecy  in  the  next.  He  shifts  the  trade 
supremacy  of  the  nations,  not  because  the  people  defi- 
nitely ask  it,  but  because  he  sees  in  advance  that  the  hour 
has  struck.  His  impulse  here  is  identical  with  that  which 
made  the  old  prophets  cry  out.  His  achievement  is  kin- 
dred to  the  victories  which  made  the  first  King.  But  we 
do  not  call  such  a  man  either  a  King  or  a  prophet ;  we  call 
him  a  Captain  of  Industry.  As  a  matter  of  fact,  few 
Kings  have  made  so  deep  a  mark  on  the  history  of  the 
race  as  certain  American  business  men. 

Above  everything  else,  our  business  man  is  a  leader 
in  establishing  standards  of  commercial  honor.  The 
cleanest,  the  best  securities  in  the  world,  are  those  that 
represent  the  doings  of  the  business  man.  The  securities 
of  the  nations  are  no  better;  the  pledges  of  most  coun- 
ties and  cities  are  not  so  good. 

The  critics  think  and  the  world  generally  thinks  that 
our  ideals  are  low,  and  that  the  children  of  the  spirit  have 


1804—1904  Centennial  Oration  391 

departed  from  us  because  this  is  a  material  age.  It  is  a 
material  age,  and  we  are  proud  of  it.  We  have  work  to 
do, — great  work  to  do ;  we  rejoice  in  that  condition.  But 
we  see  beyond  that.  We  do  not  make  the  mistake,  while 
harnessing  Niagara,  hurling  great  trains  across  the  con- 
tinent, and  burrowing  under  great  cities  and  rivers,  of 
supposing  that  these  achievements  are  of  themselves 
vastly  important.  These  great  projects  appeal  to  us  be- 
cause they  have  fallen  to  us  to  do,  and  we  know  that  if 
we  failed  to  do  them,  we  would  fairly  be  condemned  by 
all  coming  generations;  but  the  doing  of  these  things  in 
the  far  reach  of  affairs  inspires  the  children  of  the  spirit 
and  does  not  smother  them. 

We  do  business  and  we  dream,  too. 

We  grapple  with  practical  problems  and  philosophize 
at  the  same  time. 

We  get  a  glimpse  of  Revelation  while  struggling  with 
the  problems  of  Genesis. 

There  is  philosophy  in  a  limited  train. 

There  is  beauty  in  an  ocean  greyhound. 

There  is  a  perpetual  miracle  in  the  long  distance  tele- 
phone. 

There  is  a  philanthropy  as  well  as  power  in  a  billion 
dollar  corporation. 

The  man  who  is  big  enough  to  handle  a  great  modern 
enterprise  is  broad  enough  to  be  a  statesman,  sound 
enough  to  be  a  philosopher,  dreamer  enough  to  be  a  poet, 
generous  enough  to  be  a  philanthropist.  Almost  without 
exception  our  great  business  men  are  men  of  imagination. 
Indeed,  it  is  certain  that  the  representatives  of  none  of 
the  so-called  learned  professions,  at  the  time  when  they 
were  in  their  heyday,  ever  needed  for  success  the  breadth 
of  view,  the  charity,  the  humanity,  the  philosophy  and 
the  ability  now  necessary  for  great  business  success. 

I  have  said  that  the  world  sent  its  choice  grain  here 


392  Other  Addresses 

to  plant  a  new  civilization  based  on  a  re-adjustment  of 
things, — based  on  co-operation,  on  production  as  distin- 
guished from  destruction ;  based  on  conditions  that  would 
make  life  worth  while  not  only  for  the  privileged  few, 
but  for  all  who  had  energy  enough  to  deserve  it. 

This  can  now  be  restated  by  saying  that  our  civiliza- 
tion is  based  on  a  new  conception  of  the  value  of  human 
life.  Strangely  enough,  human  life  has  always  been 
cheaply  held.  It  has  been  scattered  as  a  spendthrift  scat- 
ters money  in  support  of  political  ambition,  religious 
dogma,  and  for  gain.  The  greater  part  of  what  we  call 
history  is  merely  a  recital  of  how  thousands  were  slaugh- 
tered because  of  some  difference  of  opinion  over  geo- 
graphical boundaries,  or  some  difference  of  opinion  as  to 
the  hereafter. 

Our  civilization  sounds  a  note  which  reverses  all  this 
and,  for  the  first  time,  aims  to  put  things  in  their  proper 
relation.  It  insists  that  the  precious  thing, —  the  thing  to 
be  conserved  and  elevated  and  saved,  is  human  life.  In 
developing  this  truth  we  have  only  made  a  beginning, 
yet  that  beginning,  translated  into  facts  and  figures,  is 
startling  in  its  proportions  and  staggering  in  its  sugges- 
tions. 

The  plain,  quiet  citizen  has  had  a  chance  and  has  been 
doing  things.  He  has  been  working  his  way  upward  from 
the  condition  of  that  earlier  time  when  industry  was  not 
regarded  as  entirely  honorable,  was,  indeed,  in  chains. 
He  has  had  a  part  in  this  new  conquest  of  the  forces  of 
nature;  he  has  been  very  busy  making  his  place  in  this 
new  style  of  civilization.  He  is  to-day  what  may  be  called 
the  truly  rich  man. 

Let  me  state  one  fact  without  going  into  statistics,  a 
fact  that  is  not  singular,  that  gives  only  one  view  out  of 
many,  of  the  unprecedented  achievements  of  the  toiler, 
the  unknown,  the  unnoticed,  the  unadvertised.  On  Janu- 


1804—1904  Centennial  Oration  393 

ary  1,  1904,  the  aggregate  of  savings  banks  deposits  in 
this  country  added  to  the  total  obligations  which  the 
ordinary  citizen  had  then,  under  a  great  system  of  co- 
operation, undertaken  to  pay,  amounted  to  $21,500,000,- 
000.  (I  do  not  name  this  particular  phase  of  co-operation 
from  fear  that  you  may  think  I  am  talking  "shop.") 
This  is  almost  two-thirds  the  public  debt  of  all  the  na- 
tions of  the  world.  Before  this  total  all  the  private  for- 
tunes of  which  we  know,  and  of  which  we  hear  much, 
shrivel  into  inconsequence.  The  present  market  value  of 
all  the  stock  of  the  greatest  corporation  yet  organized  is 
to  this  as  one  to  one  hundred.  The  dream  of  a  new  civili- 
zation, where  things  should  be  readjusted,  where  life 
would  be  worth  while  for  all  and  not  for  a  privileged 
few,  begins  in  this  fashion  to  take  material  form. 

What  these  figures  will  reach  during  the  lifetime  of 
most  of  us  is  uncertain,  but  they  promise  to  become  the 
greatest  of  all  conservative  powers — not  in  the  interest 
of  dynasties  or  families,  but  in  the  interest  of  that  unit 
on  which  any  permanent  civilization  must  rest — the  man 
in  the  street. 

In  the  working  out  of  this  great  purpose,  devotion, 
spirituality,  sacrifice,  the  things  of  the  spirit  may  not  be 
in  evidence,  or  may  not  give  the  evidences  that  are  usu- 
ally recognized;  but  sacrifice  of  the  very  highest  type  is 
there;  honor  surpassing  the  standards  of  the  days  of 
chivalry  is  also  there.  And  the  master  of  all  is  the  man 
of  business.  His  control  is  sane  and  sound  and  philo- 
sophical. He  uses  the  professions,  old  and  new,  to  for- 
ward the  cause  he  labors  in,  but  he  commands.  His  is  the 
great  career.  He  especially  beckons  the  scholar, — not  the 
scholar  whose  "native  resolution  is  sicklied  o'er  with  the 
pale  cast  of  thought,"  but  the  scholar  who  is  also  a  man 
of  action. 

I  commit  no  heresy  when  I  say  that  in  this  titanic 


394  Other  Addresses 

struggle  the  scholar  thus  far  has  not  borne  his  proper 
part.  He  has  been  too  much  worried  over  the  danger 
that  might  come  to  the  children  of  the  spirit ;  he  has  been 
too  much  horrified  over  the  dirt  of  politics, — too  much 
disturbed  by  the  apparent  dominance  of  the  dollar.  But, 
clinging  to  the  professions,  the  scholar  cannot  escape 
business  if  he  would.  The  old-fashioned  lawyer,  like  the 
old  type  of  statesman,  is  about  as  near  a  tradition  as  the 
Shepherd  Kings  of  Egypt.  The  lawyer  of  consequence 
to-day, — who  wields  real  power,  who  brings  things  to 
pass,  who  succeeds, —  almost  never  appears  in  court.  He 
depends  on  his  knowledge  of  law,  and  of  business,  not  on 
his  eloquence.  His  duty  is  to  keep  his  clients  out  of 
trouble,  not  to  get  them  out  of  trouble.  He  is  probably 
either  in  the  service  of  a  group  of  corporations  or  devoted 
to  work  that  keeps  him  constantly  in  that  atmosphere. 
In  some  fashion  this  same  change  has  come  to  the  Doctor 
of  Medicine  and  to  the  Doctor  of  Divinity.  There  has 
been  indeed  a  re-adjustment  of  things. 

The  men  who  have  led  in  the  industrial  and  business 
developments  of  the  past  twenty-five  years  are  men  not 
unlike  the  contemporaries  of  Ira  Allen  and  Thomas  Chit- 
tenden.  They  are  pioneers.  With  prophetic  eye  they  saw 
the  opportunity.  They  went  out  ahead  of  the  established 
order  because  they  discovered  an  empire  lying  just  be- 
yond. They  frequently  found  themselves  on  the  border- 
land of  law  and,  in  some  cases,  actually  pushing  organiza- 
tion to  points  where  no  statute  applied.  Of  course  this 
was  dangerous. 

The  dangers  of  the  frontier  are  always  real,  whether 
they  assume  the  form  of  savages  and  wild  beasts  or  of 
legislators  and  blackmailers.  But  the  men  who  lead  in 
such  enterprises  have  the  poet's  soul  and  the  warrior's 
heart. 

Unwittingly  no  finer  tribute  has  been  paid  to  this 


1804 — 1904  Centennial  Oration  395 

type  than  that  offered  by  the  chief  law  officer  of  the 
United  States  recently,  when  attacking  in  court  the  great 
plan  which  a  certain  famous  organization  had  worked 
out  for  the  development  of  our  mighty  Northwest,  and 
to  control  the  trade  of  the  Orient.  He  referred  sneer- 
ingly  to  certain  master  spirits  as  "Oriental  Dreamers — 
Empire  Builders".  And  so  they  are.  The  great  business 
man  is  always  a  dreamer;  he  must  be.  He  is  an  empire 
builder  also,— the  chief  empire  builder  of  this  day. 

Like  Columbus  he  stands  on  the  shore  of  tossing  seas 
which  divide  him  from  his  desire.  He  sets  sail,  in  craft 
frequently  as  frail  as  those  which  carried  the  great 
Genoese.  He  is  tossed  and  storm  swept;  his  crews  mutiny 
and  sometimes  take  possession  and  turn  pirates.  But 
now  and  then  a  voyage  prospers  and  he  discovers,  not 
the  land  of  his  dreams,  but  a  new  world.  Whether  that 
new  world  is  Production,  or  Transportation,  or  Co-operation, 
or  Steel  and  Iron,  or  Electricity,  or  Commercial  Honor, 
the  master  who  finds  it  and  rules  it  must  be  as  much  a 
Poet  as  a  Man  of  Action,  as  much  a  Dreamer  as  a  Doer, 
as  much  a  Child  of  the  Spirit  as  a  Man  of  the  World. 
Such  is  our  business  man  and  such  are  his  qualities  and 
his  potentialities. 

When  the  civilization,  which  he  has  outlined  and  fash- 
ioned, will  flower,  when  the  superstructure  which  is  rising 
on  this  new  foundation  will  reach  the  fullness  of  its 
majestic  plan,  I  do  not  predict;  but  that  its  imagination 
and  philosophy,  its  courage  and  spirit  of  prophecy,  its 
love  of  justice,  and  good  order,  its  hatred  of  war  and 
waste,  its  fierce  energy  and  ambition,  will  ultimately  tri- 
umph in  letters  and  learning,  in  true  religion  and  in  art, 
as  completely  as  it  will  itself  triumph  in  science,  in  trade, 
and  in  the  councils  of  the  nations,  is  certain. 

The  immediate  opportunity  of  the  college-bred  man  is 
in  hastening  the  day  when  letters  and  philosophy,  true 


396  Other  Addresses 

religion  and  art  shall  take  places  where  they  will  as  far 
surpass  their  earlier  achievements  as  this  civilization  sur- 
passes in  its  standards  any  other  now  existing  or  that 
has  passed  away. 

But  the  short  road  to  this  opportunity,  during  the 
opening  years,  at  least,  of  the  oncoming  century,  does  not 
lead  through  the  study  or  the  cloister  but  through  the 
market  place,  under  the  smoke  of  the  blast  furnace, 
through  the  banking-house,  into  the  almost  immeasurable 
energies  of  corporate  and  co-operative  enterprise. 

The  college-bred  man  who  would  be  a  real  part  of  the 
forces  that  control  must  follow  this  road.  He  must  keep 
his  ideals,  but  the  best  way  to  keep  them  is  to  get  into 
the  fight  and  impress  them  on  the  world  by  doing  a 
master's  part.  That  part  demands  the  clear  head,  the 
strong  hand,  the  steady  nerves,  the  courage,  the  unselfish- 
ness, the  integrity  and  the  idealism  that  distinguish  the 
story  and  the  men  of  the  first  century  of  the  University 
of  Vermont. 


PROFESSOR  HENRY  A.  P.  TORREY 

A  TRIBUTE. 


UNITEBBITT  OF  VERMONT.    JUNE  23,  1903 


!Y  tribute  to  Professor  Torrey  must  be 
limited  and  determined  by  such  memories 
of  college  days  as  remain  after  the  lapse 
of  almost  a  quarter-century.  Viewed 
through  the  atmosphere  which  these  mem- 
ories create,  Professor  Torrey  presents 
to  me  a  figure  at  once  heroic  and  gentle, 
wise  and  simple;  full  of  appeal,  however 
regarded,  to  all  that  is  manly  and  whole- 
some. 

A  tribute  based  on  such  memories  may  not  be  one  that 
will  satisfy  a  critic,  because  it  goes  straight  back  to  the 
feelings  aroused  in  the  heart  of  a  boy  of  twenty  by  the 
contemplation  of  his  character,  and  will  necessarily  be 
colored  by  the  admiration  of  the  student  for  the  master; 
it  will  be  influenced  by  the  almost  romantic  devotion 
natural  to  youth,  while  contemplating  a  mind  so  subtle,  so 
clear  and  so  profound  as  his. 

I  never  knew  Professor  Torrey  in  any  other  relation. 
I  never  had  the  privilege  of  meeting  him  socially,  and 

397 


398  Other  Addresses 

rarely  had  an  opportunity  to  shake  hands  with  him  later 
in  life,  when  through  the  passage  of  years,  I  might  have 
felt  that  I  was  meeting  him  man  to  man.  I  get  some  con- 
solation out  of  that  fact.  I  am  willing  to  admit  that  not 
having  known  him  socially,  or  as  man  to  man,  I  have  prob- 
ably lost  a  great  deal ;  but  if  I  had  met  him  as  most  of  you 
have,  if  I  had  known  him  as  most  of  you  did,  I  am  certain 
I  should  have  lost  something,  and  I  am  certain  I  should 
have  gained  something ;  and  when  I  say  that  I  am  not  cer- 
tain that  my  gain  would  have  been  greater  than  my  loss,  I 
am  in  no  way  lessening  my  tribute  to  our  departed  friend ;  I 
am  only  admitting  that  the  intervening  years  have  swept 
me  into  a  world  where  I  might  have  misunderstood  him. 

It  is  certain  that  Professor  Torrey  was  in  no  sense  a 
man  of  the  world;  that  wasn't  his  mission.  Life  led  him 
toward  the  cloister  rather  than  the  forum.  In  the  presence 
of  modern  business,  brought  practically  face  to  face  with 
the  problems  that  control  modern  life,  Professor  Torrey 
would  have  been  a  child.  His  great  wisdom  was  not  of 
the  sort  that  could  solve  these  problems  in  direct  contact. 
Life  was  kind  and  kept  him  in  the  world  which  he  under- 
stood. I  knew  him  and  remember  him  only  in  that  world ; 
and  to  me  he  is  a  man  almost  without  a  weakness.  I  see 
him  and  shall  remember  him  only  in  his  own  proper  sphere 
of  life.  I  remember  him  as  the  philosopher  living  in  a 
congenial  atmosphere,  untouched  by  the  material  and 
sordid;  having  little  and  wanting  little;  satisfied  indeed 
with  what  he  had;  poor,  as  the  world  estimates  men,  but 
rich  beyond  all  calculation  in  those  rare  possessions  which 
satisfied  his  soul ;  possessions  which  may  not  be  transmitted 
by  written  wills,  but  which  he  has  transmitted  in  abundance 
to  you  and  to  me  and  to  all  who  knew  him. 

Professor  Torrey  being  what  he  was  could  never 
have  been  rated  a  great  man  by  the  world  as  it  is ;  and  yet 
he  was  a  great  man;  in  some  ways  he  was  a  prophet.  His 


Professor  Henry  A.  P.  Torrey  399 

character  and  mind  foreshadowed  something  of  what  man 
ought  to  be,  and  possibly  sometime  will  be.  In  his  passage 
through  the  mystery  that  precedes  life,  all  the  baser 
instincts  and  desires  and  passions  were  burned  out  of  him, 
and  he  came  into  this  cycle  of  existence  purged  of  the  faults 
with  which  most  of  us  constantly  struggle.  This  world 
could  not  in  any  large  part  recognize  him  for  what  he  really 
was,  yet  it  is  easy  to  construct  in  one's  mind  a  world  in 
which  Professor  Torrey  would  be  recognized  as  a  great  man, 
and  it  doesn't  seem  to  me  that  that  imaginary  world  is  an 
impossibility  either.  If  we  could  bring  ourselves  to  believe 
in  some  theory  of  the  transmigration  of  souls,  we  might 
get  comfort  from  the  belief  that  his  world  somewhere 
exists,  and,  therefore,  that  at  sometime  Professor  Torrey 
will  come  into  his  own;  will  be  recognized  not  only  by  us, 
but  by  everyone,  for  what  he  really  was.  In  any  case,  those 
of  us  who  passed  through  his  class-room  and  sat  under 
his  instruction  have  already  had  a  little  glimpse  of  that 
ideal  world  and  its  fashion  of  manhood;  and  we  meet 
to-day  to  acknowledge  that  opportunity,  and  to  record  that 
obligation,  and  to  pay  our  tribute  to  his  memory. 

The  farther  one  gets  from  his  four  years  in  college, 
the  more  personalities  stand  forth.  With  each  passing 
year  one  has  a  clearer  memory  of  men,  of  a  few  men, 
and  a  vaguer  memory  of  books,  and  of  college  life  gener- 
ally. At  a  distance  of  almost  a  quarter-century  one 
begins  to  realize  this  forcibly.  Every  man  who  passed 
through  the  halls  of  the  University  of  Vermont,  at  least 
during  the  period  of  my  connection  with  it,  as  a  student, 
will  remember,  as  long  as  he  remembers  anything,  the 
personal  power,  the  personal  influence  of  at  least  two  men — 
we  may  not  speak  of  the  living— Professor  Pettie  and  Pro- 
fessor Torrey.  It  is  impossible,  even  after  twenty  years,  to 
analyze  and  describe  exactly  how  these  men  were  able  to 
reach  a  boy's  soul,  to  tell  how  they  could  by  a  turn  of  the 


400  Other  Addresses 

head,  by  a  glance,  by  a  cadence  in  the  voice,  make  the  boy 
tingle  from  head  to  foot  with  the  love  of  everything  that 
was  beautiful  and  with  scorn  of  everything  that  was  mean : 
but  they  had  that  power;  and  that's  what  counts  in  edu- 
cation; that's  what  abides. 

This  is  what  paints  my  picture  of  Professor  Torrey. 
It  is  a  power  without  which  no  teacher  can  be  a  great 
teacher ;  a  power  which  few  men  have  ever  had.  I  doubt  if 
any  pupil  escaped  the  impress  which  he  so  naturally  left 
on  everything  he  touched.  However  dull  or  ordinary  the 
student,  Professor  Torrey  could  in  some  way  reach  him. 
He  might  not  instruct,  but  he  could  inspire.' 

Therefore,  before  he  passed  into  the  mystery  that  stands 
at  the  end  as  well  as  the  beginning  of  every  life,  Professor 
Torrey  had  insured  for  himself  a  kind  of  immortality 
which  doesn't  permit  of  discussion;  he  still  lives  in  the 
flesh  and  will  continue  to  live  so  long  as  his  pupils,  or 
their  children  live,  or  have  traditions.  And  my  tribute  to 
him  is  perhaps  best  summed  up  by  differing  with  the 
philosophy  which  Shakespeare  puts  into  Hamlet's  tribute  to 
the  dead  King: 

"He  was  a  man,  take  him  for  all  in  all, 
I  shall  not  look  upon  his  like  again." 

Instead,  of  our  dead  Master,  shall  we  not  say:  He  was  a 
man  gentle,  wise,  sane,  great ;  who  gave  of  his  strength  and 
life  to  us  so  generously  that  he  has  been  translated,  and 
while  we  may  not  hereafter  see  his  familiar  figure,  we  shall 
indeed  "look  upon  his  like  again". 


PURITANISM:  A  LIVING  FORCE 


Al-TKB-DlNNEB    RESPONSE    BEFOBK  THE  NEW  ENGLAND    SOCIETY   OF  PENNSYLVANIA. 

DECEMBER  23,  1907 


E  do  well  to  keep  the  festivals  of  the  fathers. 
We  do  well  to  keep  alive  not  only  in  the 
written  page  but  through  personal  con- 
tact and  through  the  living  influence  of 
the  spoken  word  memories  of  events 
which  touch  the  imagination  and  invoke 
the  prophetic  voice. 

History  has  its  seed  time  and  its  har- 
vest. The  harvest  is  not  made  up  alto- 
gether of  tragedies,  although  the  history  of  the  world  as 
written  deals  chiefly  with  the  wars  of  the  world.  The 
harvest  after  all  is  in  the  development  of  States,  in  the 
dissemination  of  the  principles  of  liberty,  in  the  establish- 
ment of  religious  freedom,  and,  in  these  later  days,  in  the 
establishment  of  a  new  type  of  society  in  which  men  have 
taken  on  new  relations  to  each  other  and  new  relations  to 
property. 

The  events  in  history  which  permanently  and  profoundly 
move  us  are  connected  with  the  seed  times.  The  first  set- 
tlement at  Jamestown,  the  landing  of  the  Pilgrims,  the 
establishment  of  a  colony  under  the  charter  secured  by 


401 


402  Other  Addresses 

William  Perm,— these  invoke  the  prophetic  voice;  these 
touch  the  imagination ;  these  draw  men  together :  they  make 
the  pulse  beat;  they  revive  hope  and  faith  and  courage. 
In  no  such  fashion,  notwithstanding  its  fearful  significance 
and  almost  unending  influence,  do  we  celebrate  the  liberties 
gained  through  the  French  Revolution,  or  the  liberties 
gained  through  any  similar  tragedy  in  human  history.  We 
celebrate  some  of  these  events,  but  not  in  the  spirit  that 
moves  us  when  we  celebrate  Forefathers'  Day. 

Within  the  history  of  the  world  with  which  we  are 
familiar,  the  great  seed  time  was  from  1607  to  1681. 
Within  that  short  period  seed  was  planted  at  Jamestown, 
at  Plymouth,  at  Salem,  in  New  Amsterdam,  in  Maryland, 
in  Rhode  Island,  in  the  two  Jerseys  and  in  Pennsylvania. 
Events  crowded  thick  upon  one  another.  Each  movement 
represented  a  separate  impulse  springing  from  the  civil 
and  religious  conditions  in  England,  and  each  has  played  so 
splendid  a  part  in  the  development  of  the  great  Western 
Republic  that  comparisons  and  contrasts  seem  invidious 
and  can  be  profitable  only  because  of  the  lessons  which  they 
teach. 

There  was  no  real  moral  impulse  back  of  the  movement 
which  founded  the  colony  at  Jamestown,  none  back  of  the 
movement  which  first  established  New  Amsterdam.  The 
Pilgrims,  on  the  other  hand,  represent  so  many  ideas  which 
we  revere  that  it  is  difficult  to  state  the  facts  conservatively. 
They  left  England  for  conscience'  sake.  They  settled  in 
Holland.  But  while  they  gained  there  the  religious  freedom 
which  they  so  painfuly  sought,  they  soon  realized  that 
their  identity  as  Englishmen  would  ultimately  be  lost. 
They,  therefore,  gave  up  the  comfort  and  peace  and  liberty 
which  they  had  achieved,  and,  in  response  to  the  instinct 
of  nationality,  faced  the  terrors  of  the  wilderness,  put 
themselves  back  under  the  dominion  of  the  King  from 
whose  jurisdiction  they  had  fled,  determined,  it  is  true, 


Puritanism:   A  Living  Force  403 

to  worship  God  according  to  their  own  ideas,  but  perhaps 
even  more  determined  to  preserve  their  identity  as  English- 
men. 

The  Puritan  who  followed  the  Pilgrim  represented  a 
revolution  which  was  again  quite  as  much  political  as  re- 
ligious. He  first  of  all  stood  sternly  for  purity  of  life.  The 
key  word  that  most  completely  explains  both  the  Pilgrim 
and  the  Puritan  is  Morality.  Human  conduct  was  really 
their  goal.  We  admire  the  Puritan's  hqroic  qualities 
and  applaud  his  fidelity  to  principle,  but  candor  com- 
pels us  to  admit  that  it  was  almost  impossible  for  a 
sympathetic  human  being  to  exist  under  the  first  govern- 
ment he  founded.  His  own  stock  could  not  endure  it  long, 
and  so  they  scattered  the  seed  and  widened  the  planting; 
they  migrated— each  migration  representing  a  fresh  re- 
bellion—to Narragansett  Bay,  to  Hartford,  to  New  Haven, 
to  Saybrook  and  even  to  the  Jerseys.  They  stood  every- 
where for  self-government  as  they  understood  it,  and 
for  purity  in  personal  conduct.  Whatever  they  sought 
they  sought  intensely.  This  explains  such  various  and 
almost  hostile  developments  as  the  Mayflower  compact, 
the  Puritan  theocracy,  and  the  complete  religious  lib- 
erty established  in  Rhode  Island.  It  explains  the 
confederacy  of  those  Connecticut  towns  founded  by 
the  Pilgrims  and  by  the  Puritans  organized  under  "the 
first  written  constitution  known  to  history  that  created  a 
government".  Each  migration  represented  a  different 
form  of  protest,  a  different  ambition,  a  different  hope. 
Well  has  the  historian  said  of  this  period,  and  his  comment 
is  almost  equally  applicable  to  the  two  succeeding  centuries, 
"The  Puritanism  of  New  England  originated  and  fostered 
the  free  and  radical  working  instrumentalities  and  forces 
which  neutralized  its  own  errors,  restrained  its  own  bigotry 
and  severity  and  compelled  it  to  develop  from  its  own  ele- 
ments something  better  than  itself". 


404  Other  Addresses 

While  Pilgrim  and  Puritan  sprang  from  the  same  stock 
and  were  impelled  by  similar  motives,  our  sympathies  are 
always  with  the  little  band  which  landed  at  Plymouth  in 
1620.  It  stirs  our  pulses  still  to  recall  that  although 

"The  breaking  waves  dashed  high 
On  a  stern  and  rock-bound  coast", 

and  although  one-half  of  the  colonists  perished  during 
the  first  Winter,  there  was  not  a  single  backslider 
amongst  the  survivors  when  the  Mayflower  sailed  away 
the  following  year.  The  grim  determination  and  the 
success  of  Plymouth  set  in  motion  the  great  exodus 
from  the  ranks  of  English  Puritanism — when  the  King 
determined  to  rule  without  a  Parliament,  when  the 
Church  asserted  the  divine  right  of  kings.  Puritans  in 
England  turned  to  their  kinsmen  beyond  the  sea,  who  were 
enduring  hardships  in  a  new  land,  but  were  in  bondage 
to  no  man.  The  impulse  that  brought  the  Puritans 
to  New  England  was  not  exhausted  by  that  exodus,  it  con- 
tinued to  work  at  home  until  one  king  lost  his  head 
and  another  his  throne,  and  the  principle  of  responsible 
representative  government  was  established  there  about  as 
completely  as  here.  But  the  union  of  Church  and  State  re- 
mained and  has  continued  to  plague  our  British  cousins  to 
this  day.  Here,  on  the  other  hand,  Church  and  State  have 
been  so  completely  divorced  that  we  are  at  present  dis- 
turbed only  by  the  question  whether  the  rights  of  con- 
science are  infringed  when  Christmas  carols  are  sung  in  the 
public  schools. 

The  faults  of  the  Puritan  were  the  faults  of  his  times. 
The  Puritan's  claim  to  charity  lies  in  the  fact  that  he 
continuously  outgrew  his  faults.  The  colony  of  Massa- 
chusetts Bay  at  first  allowed  only  church  members  to  vote, 
but  the  colony  of  Connecticut  only  ten  years  later  imposed 
no  such  test  on  suffrage.  Massachusetts  banished  Roger 


Puritanism:   A  Living  Force  406 

Williams  and  put  to  death  the  Quakers  who  would  not 
accept  their  liberty  and  go  away.  These  were  grievous 
errors,  even  though  they  were  committed  in  obedience 
to  the  principle  under  which  we  refuse  to  allow  an- 
archists to  land  on  our  shores.  Forty  years  afterwards 
Massachusetts  revoked  the  decree  of  banishment  against 
Roger  Williams,  and  the  severe  laws  against  Quakers  were 
in  force  only  five  years.  The  witchcraft  delusion  was  also 
a  delusion  of  the  times  and  its  special  manifestations  at 
Salem  were  brief  though  bloody;  but  with  this  outbreak 
the  delusion  came  to  an  end.  As  the  Puritans  outgrew 
their  faults  so  they  recognized  one  by  one  the  great  princi- 
ples of  democratic  government.  No  taxation  without  rep- 
resentation was  established  in  1631  when  Watertown 
refused  to  be  taxed  to  build  a  palisade  at  Cambridge.  In 
1644  the  controversy  over  the  Widow  Sherman's  stray  pig 
resulted  in  the  establishment  of  two  legislative  chambers, 
each  of  which  had  a  veto  on  the  other.  The  movement  was 
rapid.  In  1639  representatives  of  the  towns  of  Hartford, 
Windsor  and  Weathersfield  met  in  General  Court  and 
formed  a  federation  which  foreshadowed  the  Federal 
Constitution  of  a  century  and  a  half  later.  Powers  not 
granted  under  the  Constitution  were  reserved  to  the 
towns ;  the  Governor  and  Council  were  chosen  by  popular 
vote;  each  town  had  equal  representation  in  the  General 
Court.  This  constitution  not  only  remained  the  organic 
law  of  Connecticut  until  1818,  but  the  "Connecticut  Com- 
promise ",  which  embodied  the  equality  of  the  States  in 
the  Federal  Union,  saved  the  Constitutional  Convention 
of  1787  from  breaking  up  in  despair. 

While  the  Puritan  was  a  religious  enthusiast  with  a 
passion  for  self-government,  while  he  was  stern  and  nar- 
row, and  to  the  superficial  view  unsympathetic,  he  never 
sought  the  millennium  by  any  short  cut.  He  set  his  face 
toward  a  Heavenly  City,  but  he  kept  his  feet  upon  the 


406  Other  Addresses 

solid  earth.  He  had  no  new  theories  about  property  nor 
about  marriage.  He  believed  in  God  as  the  Governor  of 
the  Universe,  and  while  he  committed  himself  in  every 
contest  to  the  providence  of  God,  he  kept  his  sword  sharp 
and  his  powder  dry.  While  he  was  not  over  tolerant  of 
new  ideas,  he  did  not  fear  an  appeal  to  reason.  He,  there- 
fore, founded  Harvard  College  when  the  colony  was  only 
eight  years  old.  He  frequently  compromised.  He  yielded 
something  of  his  theocratic  views  in  order  to  bring  New 
Hampshire  into  the  united  colonies  of  New  England,  and 
in  1657  he  invented  the  "half-way  covenant "  in  order  to 
hold  the  rising  generation  in  the  Church.  Even  stout  old 
John  Davenport,  the  founder  of  New  Haven,  the 
staunchest  defender  of  theocracy, 1 1  the  Lord  gave  to  see ' ', 
as  Cotton  Mather  phrased  it,  that ' '  in  this  world  a  Church- 
State  whereinto  there  enters  nothing  that  defiles"  was 
impossible. 

The  Puritan  knew  how  to  labor  and  to  wait.  He  in- 
stinctively felt  that  the  stars  in  their  courses  fought 
against  his  enemies. 

If  I  were  speaking  to  a  Pennsylvania  Society  in  Boston, 
I  should  not  fail  to  remark  that  as  recently  as  the  time 
of  the  Declaration  of  Independence,  Pennsylvania  and 
Delaware  were  the  only  colonies  in  which  all  Christian  de- 
nominations stood  upon  an  equal  footing,  and  that  these 
colonies  were  founded  by  Quakers.  If  I  were  addressing 
the  Southern  Society  in  New  York,  I  could  not  forget  that 
Virginia  had  her  House  of  Burgesses  before  the  Pilgrims 
left  Holland,  and  that  Maryland,  under  a  Charter  granted 
in  1632  by  a  Protestant  King  to  a  Catholic  Lord  Proprie- 
tor, enjoyed  the  largest  degree  of  religious  toleration  then 
known  in  North  America.  But  except  Virginia,  none  of 
these  colonies  had  been  founded  when  the  Pilgrims  came 
to  Plymouth,  and  no  colonies  except  those  of  New  England 
were  settled  by  homogeneous  bodies  of  men  under  religious 


Puritanism:   A  Living  Force  407 

teachers.  It  was  this  community  of  feeling,  this  unity  of 
thought  and  purpose,  this  common  ancestry  and  traditions 
which  have  made  the  New  England  colonies  a  continuing 
force  in  the  New  World,  and  resulted  in  the  orderly  growth 
and  development  of  the  principles  of  self-government. 

In  all  the  movements  which  make  up  the  subsequent 
history  of  the  colonies,  and  the  history  of  the  Nation,  the 
Puritan  has  played  an  important  part,  particularly  when 
questions  at  issue  were  questions  of  morals. 

We  have,  in  form  at  least,  a  representative  government, 
and  there  is  an  indissoluble  union  of  indestructible  States; 
there  is  not  only  toleration,  there  is  perfect  freedom  of 
conscience  wherever  the  flag  floats.  There  are  no  more 
Royal  Governors,  no  more  Lord  Proprietors  in  Maryland 
and  Pennsylvania,  no  more  Patroons  on  the  Hudson,  no 
more  Lord  Bishops  in  Virginia,  no  more  "Lord  Brethren" 
in  Massachusetts.  We  have  settled  the  question  of  how  the 
unoccupied  portion  of  the  national  domain  shall  be  gov- 
erned, and  disposed  of;  we  have  settled  the  question  of 
slavery ;  but  we  have  not  settled  the  question  of  the  rela- 
tions between  the  States. 

The  local  rights  of  the  States,  the  relation  of  the  States 
to  the  general  government,  and  the  relation  of  modern 
business  to  both, — these  include  the  substance  of  our 
present-day  problems. 

The  plans,  the  organization,  the  usefulness  and  the 
inherent  rights  of  business  as  we  conduct  it,  are  all  conti- 
nental in  their  scope.  Business  as  we  have  planned  it 
cannot  do  what  we  demand  of  it  if  we  follow  any  but 
heroic  models.  Even  our  domestic  and  every-day  economy 
partakes  of  the  same  character.  Our  food,  our  clothing, 
our  water  supply,  the  lights  in  our  homes,  transportation 
and  education  all  are  parts  of  great  units,  which  ramify 
over  considerable  territories,  and  are  bound  together  by 
indissoluble  ties.  Local  interests  in  the  earlier  sense  have 


408  Other  Addresses 

disappeared.  There  are  no  local  interests.  St.  Paul  fore- 
shadowed our  civilization  when  he  said  "For  none  of  us 
liveth  to  himself ". 

Every  important  business  seeks,  naturally  and  prop- 
erly, under  the  stimulus  of  the  telephone,  the  telegraph, 
the  limited  train,  and  that  legal  device  called  the  cor- 
poration, to  meet  to  the  full  its  opportunities  in  forty-six 
States.  The  genius  of  our  people,  the  topography  of  the 
country,  the  method  of  its  conquest  and  settlement,  all 
demand  this  of  business.  Yet,  strange  contradiction,  busi- 
ness is  held  up  at  forty-six  frontiers,  harassed  by  forty-six 
different  and  separate  Legislatures,  each  of  which  claims 
and  exercises  substantially  complete  control  over  what  In- 
terstate business  shall  and  shall  not  do  in  all  the  other 
States.  As  against  certain  interests,  a  considerable  num- 
ber of  States  have  even  nullified  the  explicit  provision  in 
the  Constitution  of  the  United  States  which  guarantees  the 
protection  of  the  Federal  Courts.  States  deliberately  cul- 
tivate sectionalism  and  become  rivals  in  questions  of 
morals  as  well  as  of  business.  One  State  seeks  revenue 
through  laws  which  are  framed  to  make  the  issue  of  ques- 
tionable charters  easy;  another  seeks  to  increase  its  popu- 
lation and  revenues  by  making  divorce  easy. 

The  issue  strikes  deep  and  involves  the  most  serious 
consequences.  Just  where  to  place  the  Puritan  in  this 
coming  struggle  I  am  not  sure.  But  in  a  collateral,  a  more 
immediate,  a  preliminary,  and  perhaps  an  equally  impor- 
tant contest,  the  Puritan 's  place  is  easily  discovered. 

The  representative  idea  for  which  the  Massachusetts 
Puritan  stood — after  some  hesitation — has  been  thor- 
oughly interwoven  with  our  business  and  general  polity. 
It  is  indeed  an  indivisible  and  inseparable  part  of  it.  In 
the  communism  of  modern  society  and  in  the  operation 
of  that  great  implement  of  modern  activity  which  we 
call  the  corporation  there  have  developed  a  new  set 


Puritanism:   A  Living  Force  409 

of  public  questions,  a  new  type  of  crime,  a  new  species  of 
criminal.  There  are  men — a  few  men — who  by  earlier 
standards  would  be  rated  respectable,  public-spirited,  pos- 
sibly even  philanthropic  men  who  would  be  shocked  at  the 
suggestion  that  they  would  steal  or  commit  murder  or 
debauch  their  fellow  citizens  or  be  guilty  of  treason,  who 
nevertheless  commit  general  and  impersonal  and  almost 
untraceable  acts,  which  when  analyzed  in  the  light  of  the 
responsibility  which  attaches  to  our  whole  program  of 
society  can  be  properly  characterized  by  no  other  terms. 

Modern  business  in  its  reach  and  results  has  opened 
up  a  new  world  in  achievement,  but  it  has  developed  some 
distressing  phases  of  human  weakness,  too.  We  no  longer 
expect  men  within  the  definition  of  the  Constitution  to  be 
traitors  to  their  country,  but  we  find  that  men  can  easily 
be  traitors  to  their  fellow  men.  In  brief  we  have  dis- 
covered that  some  men  will  do  as  representatives  of  others 
and  indirectly  what  they  would  not  think  of  doing  per- 
sonally and  directly.  We  have  planned  and  built  a  society 
in  which  every  person  is  in  some  sense  a  trustee  for  all  the 
other  members  of  society,  and  we  have  found  that  it  takes 
a  high  type  of  man  to  be  honest  and  just  when  entrusted 
with  other  people's  interests. 

There  was  something  in  the  modern  corporation  oper- 
ating in  a  field  of  almost  unlimited  opportunity  which 
appealed  to  all  of  us.  It  touched  our  national  pride,  our 
belief  in  our  ability  to  do  great  things ;  it  gave  opportunity 
to  national  energy.  We  reveled  in  it  for  a  season.  Then 
came  a  violent,  a  public  and  a  merciless  test.  The  newer 
methods  of  business  were  measured  by  the  old  standards 
of  fidelity,  without  opportunity  for  palliation  or  defense. 
The  facts  were  distorted.  There  was  some  lying  done.  But 
practices  that  were  indefensible  on  any  theory  of  business 
at  any  time  or  under  any  standards  of  morality  were  un- 
covered. Mistakenly  assuming  that  these  revelations  have 


410  Other  Addresses 

disclosed  a  general  moral  condition,  our  first  feeling  was 
amazement;  then  anger;  and  then  came  a  hysterical  fear. 
And  fear  has  wrought  its  deadly  work. 

From  too  intense  introspection  the  Puritan  of  1692 
passed  also  to  hysteria  and  finally  to  the  horrors  of  Gallows 
Hill.  We  have  had  no  Cotton  Mather  and  no  Gallows  Hill ; 
but  by  how  much  have  we  missed  both?  Are  we  so  certain 
that  a  few  generations  hence  our  initial  treatment  of  the 
excesses  developed  in  modern  business  will  be  considered 
any  less  inhuman  or  any  less  cruel  than  the  acts  of  the  good 
people  of  Salem  in  their  struggle,  as  they  believed,  with  a 
personal  devil? 

The  fury  of  1692  passed  quickly.  Our  fury  is  sub- 
siding ;  but  its  lesson,  I  take  it,  has  been  profoundly  learned. 
We  shall  pass  from  the  tyranny  of  corporations  and  from 
corporate  excesses  to  a  greater  power  and  a  better  freedom, 
just  as  the  Puritan  passed  from  his  theocracy  to  a  sound 
and  responsible  personal  liberty.  The  national  idea  will 
ultimately  overcome  the  opposition  of  localities.  The  na- 
tional method  will  be  purified.  What  we  seek  to-day  is 
what  the  Puritan  sought  three  hundred  years  ago,  viz.: 
the  elevation  of  human  conduct,  purity  of  life,— and  by  life 
we  mean  those  enlarged  relations  under  which  substantially 
every  act  of  every  man  affects  the  interests  and  the  rights 
of  every  other  man. 

The  seed  planted  in  the  seventeenth  century  has  kept 
its  character  and  quality  through  a  thousand  replantings. 
With  it  have  since  been  sown  the  siftings  of  the  world. 
There  have  been  seasons  when  a  rank  and  sudden  growth 
threatened  to  choke  and  destroy  it,  but  again  and  again 
it  has  prevailed  and  brought  in  a  harvest  of  sanity  and 
justice  and  fuller  liberty. 

So  in  the  struggle  to-day  for  higher  moral  standards 
in  business,  the  demand  is  for  the  fidelity  of  the  Puritan; 
a  fidelity  which  shall  be  as  exact  under  the  impersonal 


Puritanism:   A  Living  Force  411 

responsibilities  and  duties  of  modern  business  as  the  fidelity 
inspired  by  a  belief  in  personal  responsibility  to  a  Personal 
Being  who  is  omnipresent.  Notwithstanding  a  popular ' 
belief  to  the  contrary,  the  standards  of  business  as  a  whole 
to-day  are  not  far  from  that  conception  of  responsibility. 
They  will  constantly  approach  nearer  to  it  because  Puritan- 
ism is  a  living  force;  because  men  still  honor  the  stern 
standards  of  old  Salem;  because  men  still  love  the  liberty, 
the  charity  and  the  humanity  of  Plymouth. 


u  m 


THE  LAND  WE  LIVE  IN" 


AN  AFTER-DINNER  RESPONSE  DELIVERED  BEFORE  THE  SAINT  ANDREWS  SOCIETY  OF 

THE  STATE  OF  NEW  YORK,  WALDORF-ASTORIA,  TUESDAY 

EVENING,  NOVEMBER  30,  1909 


toast  does  not  indulge  in  the  Ian- 
guage  of  enthusiasm.  Its  spirit  breathes 
the  resignation  of  fatalism, — and  a 
touch  of  fatalism  is  not  altogether  out 
of  place  in  any  assembly  of  Scotchmen. 
It  registers  an  emotion;  it  files  a  pro- 
test; it  expresses  a  hope.  The  emotion 
is  the  love  of  Scotchmen  for  Scotland, 
for  the  highlands  and  the  heather:  this 
makes  them  hesitate  to  call  any  other  land  home;  the 
protest  lies  in  the  implication  that  the  Scotchman's  real 
abiding  place  is  not  here;  the  hope  shines  forth  in  the 
suggestion  that  home  will  finally  be  reached,  but  only 
after  the  American  Scot  has  passed  beyond  the  boun- 
daries of  the  land  where  he  now  merely  lives. 

The  toast  says,  in  effect,  that  there  are  but  two  defi- 
nite, desirable,  wholly  congenial  places, — one,  Scotland, 
the  other,  the  Kingdom  of  Heaven.  All  that  lies  between 
must  be  submitted  to  humbly  and  gratefully,  and  as  that 


412 


"The  Land  We  Live  In"  413 

necessitates  a  place  of  residence,  a  land  in  which  to  live 
while  passing  from  the  first  to  the  second  estate,  a  toast 
to  that  land  is  not  out  of  order,  provided  we  do  not  forget 
the  Land  o'  Cakes  meanwhile,  nor  ever  forget  the  place 
for  which  every  Scotchman  thinks  he  is  headed.  Of  all 
the  purgatories  which  lie  between  these  two  delectable 
lands,  we  may  safely  conclude  that  this  particular  spot, 
this  United  States,  is  rated  as  the  least  objectionable. 
Horace  Greeley  used  to  say  that  he  considered  his  lec- 
tures popular  if  the  number  of  those  who  stayed  to  hear 
him  through  outnumbered  those  who  went  away.  By 
this  test  the  United  States  is  popular.  The  native-born 
rarely  expatriates  himself;  the  foreign-born  seldom  does; 
and  notwithstanding  the  conservative  sentiment  of  this 
toast,  the  Scotchman  practically  never  does. 

The  conservatism  of  the  Scot  is  always  in  evidence. 
It  is  evident  not  only  in  the  phrasing  of  this  toast,  but  also 
in  the  time-honored  program  of  all  the  Dinners  of  this 
Society.  A  native-born  Scot  always  responds  to  the 
"Land  o'  Cakes".  That  is  done  to  restrain  the  orator. 
Of  course  a  native-born  Scot  cannot  be  as  fervid  in  his 
praise  of  Scotland  as  an  outlander  might  be.  It  wouldn't 
be  modest,  and  this  Society  is  sure  of  its  ground  when  it 
puts  a  Scotchman  in  that  position.  On  the  other  hand,  if 
the  native  American  who  always  responds  to  "The  Land 
We  Live  In",  becomes  perfervid  in  his  praises  and  for- 
gets to  be  entirely  modest,  the  Society  has  the  consolation 
of  knowing  that  the  excess  was  not  committed  by  a 
Scotchman. 

To  recite  the  usual  catalogue  of  our  country's  re- 
sources and  the  virtues  of  its  people  would  hardly  be 
responsive  to  the  sentiment  which  lies  behind  this  toast. 
If  we  point  to  the  size  of  our  country,  we  can  hardly 
expect  that  consideration  to  quicken  the  Scottish  pulse, 
because  Scottish  history,  romance,  poetry  and  song,  and 


414  Other  Addresses 

the  Scottish  national  tragedy  all  relate  to  a  small  country, 
and  as  such  never  have  been  and  never  can  be  expatriated. 
If  we  point  to  our  country's  wealth  in  land  and  in  manu- 
factures, to  its  commerce,  to  its  transportation,  and  to  its 
banking,  we  shall  perhaps  come  nearer  to  the  Scotchman's 
reason  for  proposing  this  toast,  because  Kate  Douglas 
Wiggin  's  story  of  the  Scot  who  asked  the  Lord  not  to  give 
him  great  wealth  but  just  to  show  him  where  it  was,  does 
have  a  certain  pertinence. 

I  have  sometimes  wondered  if  it  was  our  climate 
which  attracted  the  Scot.  You  must  have  noticed  that 
he  is  not  to  be  found,  or  at  least  is  not  so  numerously 
found,  in  those  portions  of  the  country  where  the  climate 
is  most  attractive.  He  seems  to  love  places  where  the  air 
is  harsh,  foggy,  smoky.  This  is  significant;  the  Scot  likes 
smoke;  therefore  he  likes  Pittsburgh;  he  even  likes  a 
smoky  taste  in  his  drinks. 

But  however  moderate  the  Scot  may  be  when  he 
phrases  a  toast,  he  has  not  been  moderate  in  his  successes, 
and  the  part  he  has  played  in  the  erection  of  this  Republic 
would  indicate  that  neither  his  memories  of  Scotland  nor 
his  hope  of  the  hereafter  have  materially  qualified  his 
present  energy  or  lessened  his  power.  Does  the  Scotch- 
man find  here,  consciously  or  unconsciously,  some  reali- 
zation of  the  hopes  and  ambitions  which  were  crushed 
at  Flodden  Field  and  historically  destroyed  at  Culloden? 
He  may  not  sing  here  as  Scotia's  immortal  bard  sang;  he 
may  not  write  with  the  magic  pen  of  Glorious  Sir  Walter ; 
he  may  not  preach  like  John  Knox.  But  does  it  follow 
that  these  qualities  have  been  lost?  Have  they  passed, 
or  have  they  been  born  into  a  New  World  and  applied 
in  a  different,  a  larger,  and  possibly  a  better  way  1 

Some  people  explain  the  indifferent  success  of  the  Uni- 
tarian Church  as  a  church  body  in  this  country  by  point- 
ing to  the  fact  that  Unitarianism  has  spread  over  the 


"The  Land  We  Live  In"  415 

entire  religious  world,  that  it  has  modified  the  creeds  of 
many  churches,  made  the  hearts  of  men  gentler,  the  mind 
of  the  religious  world  braver  and  clearer,  and  that  it  has 
done  a  great  work,  even  though  it  has  not  built  a  great 
church.  Do  Scotchmen  hold  some  such  relation  to  other 
races  and  other  nations  ?  They  lost  their  separate  nation- 
ality after  having  more  than  an  hundred  Kings;  but 
in  that  loss  did  we  and  they  find  a  greater  gain?  The 
building  of  a  nation,  the  preservation  of  national  ideals 
and  national  traditions  is  a  great  work.  But  when,  as 
now,  we  see  the  nations  lagging  behind  the  individual  in 
some  of  the  essentials  of  sound  civilization ;  when,  as  now, 
the  nations  are  increasing  their  armies,  vying  with  each 
other  in  the  size  of  their  battleships,  building  tariff  walls 
higher  and  higher,  the  suggestion  is  forced  home  that 
possibly  Scotchmen  who  have  been  unable  to  do  these 
things  as  a  nation  have  been  doing  something  better  as 
individuals.  Notable  examples  immediately  present 
themselves: — Neither  nations  nor  hemispheres  can  fix 
boundaries  for  the  beneficent,  uplifting,  individual  work 
of  Andrew  Carnegie,  and  time  only  can  put  limits  on  the 
ultimate  reach  of  the  princely  munificence  of  John  S. 
Kennedy. 

"God  sifted  a  whole  nation ",  said  Parson  Stoughton, 
"that  He  might  send  choice  grain  into  His  wilderness " 
in  New  England.  And  in  this  later  day,  if  we  copy  the 
faith  of  this  rare  old  Divine,  we  may  fairly  say  that  God 
sifted  the  world  for  the  seed  from  which  our  nation  has 
sprung. 

The  land  we  live  in  is  indeed  a  great  Melting  Pot,  into 
which  have  been  cast  the  ideals  of  all  the  nations.  Here 
Roman  Private  Law  and  English  Public  Law,  spiritual 
authority  and  individual  responsibility,  Puritanism,  Pres- 
byterianism,  Anglicism,  Judaism  and  Catholicism,  have 
come  to  grips,  and  each  has  found  its  place.  Here  man's 


416  Other  Addresses 

new  and  high  purpose  is  best  expressed  in  Milton's  majes- 
tic line  which  tells  of  his  desire  to  accomplish 

"Things  unattempted  yet  in  prose  or  rhyme." 

In  this  attempt  we  did  not  reject  old  traditions  and  old 
institutions,  as  orators  and  writers  love  to  tell  us.  We 
brought  most  of  them  here  and  put  them  to  a  new,  a 
conclusive  test.  Each  people  whose  members,  reversing 
the  historic  method  of  state-making,  have  voluntarily 
joined  in  the  creation  of  that  noble  procession  of  common- 
wealths, now  marching  under  the  flag  with  forty-six  stars, 
has  clung  to  its  traditions,  as  heroic  peoples  always  do. 
Here  have  come  face  to  face  not  only  every  type  of 
religion  and  the  great  systems  of  law,  but  every  code 
of  morals,  every  school  of  philosophy,  every  program 
of  government,  every  social  plan.  And  whereas  peoples 
have  been  and  elsewhere  are  still  divided  into  hostile 
camps  because  of  these  differences,  here,  under  our  pur- 
pose to  do  what  had  never  before  been  attempted,  they 
have  found  a  common  purpose  which  has  been  strength- 
ened and  broadened  in  spite  of — perhaps  I  should  say 
because  of — these  differences. 

The  contest  presents  a  kaleidoscope  picture  of  civic 
heroism  and  selfishness,  of  patriotism  and  meanness,  of 
progress  and  reaction.  No  man  stays  put.  We  may 
criminally  waste  our  natural  resources  and  we  may  be 
largely  ruled  by  grafters,  but  nevertheless  the  rail  split- 
ter of  to-day  may  be  the  President  to-morrow.  We  may 
seem  materialistic,  but  actually  we  have  spiritualized 
material  things;  and  herein  lies  our  appeal  to  the  Scot. 

The  Scot  is  an  idealist.  He  can  follow  the  cause  of 
1  'Royal  Charlie "  with  an  enthusiasm  that  contradicts  his 
reputation  for  worldly  sense. 

I  remember  hearing  that  sometime  Scotchman  whose 
name  will  always  be  associated  with  the  project  that  has 


"The  Land  We  Live  In"  417 

made  it  so  easy  to  get  to  New  Jersey  for  those  who  need 
that  recourse,  say,  that  all  he  had  to  contribute  to  the  con- 
struction of  the  North  River  tunnels  was  the  North  River 
itself  and  a  dream.  And  what  a  noble,  daring  conception 
it  was.  Milton  describing  war  between  immaterial  beings 
who  used  what  was  then  modern  ordnance  was  not  more 
daring. 

Byron,  in  his  imaginings,  foresaw  the  airship ;  but  are 
the  men  who  added  to  that  imagination  the  courage  to 
undertake  and  the  genius  to  accomplish  the  conquest  of 
the  air  lesser  or  greater  poets?  Is  it  less  to  be  the  Doer 
and  the  Dreamer  than  to  be  the  Dreamer  only  ?  Is  poetry 
any  less  poetry  when  you  live  it  than  it  is  when  you  write 
it!  Is  there  no  miracle  in  the  long  distance  telephone,  no 
realization  of  Puck's  extravagant  boast  in  the  limited 
train,  no  prophetic  beauty  as  well  as  power  in  the  skyline 
of  New  York?  How  far  behind  Champlain  and  Hudson 
shall  we  place  the  thousands  who  went  through  Cumber- 
land Gap  to  the  "dark  and  bloody  ground?"  That  those 
other  thousands  who  completed  the  conquest  of  a  con- 
tinent had  imagination  as  well  as  courage  we  know,  be- 
cause some  of  us  saw  a  part  of  that  contest  and  some  of 
you  were  a  part  of  it.  I  believe  that  in  such  surroundings 
the  Scot  found  what  he  liked  as  well  as  the  place  where 
the  bawbees  were  to  be  had. 

In  this  titanic  struggle — for  it  was  and  is  titanic — 
no  man  except  the  Puritan  and  the  Jew,  was  or  is  as  well 
equipped  for  action  as  the  Scot.  When  I  claim  that  at  no 
time  and  in  no  place  was  there  such  an  opportunity  for 
educated  men,  you  may  want  my  definition  of  education. 
Education  is  racial  as  well  as  individual.  The  Scottish 
race  is  an  educated  race.  The  race  which  has  learned 
certain  universal  and  imperishable  canons  of  judgment 
and  taste  is  educated.  The  race  that  goes  right,  on  most 
of  the  great  practical  issues  of  life,  with  only  common 


418  Other  Addresses 

sense  as  a  guide,  is  educated.  The  race  which  through 
inheritance  or  through  ready  acquisition  has  a  certain 
elemental  wisdom,  has  education  and  a  practical  guar- 
antee of  success.  Have  I  sketched  the  Scot? 

Does  he  reason  correctly?  Is  he  easily  fooled  by  bad 
logic?  Does  he  naturally  go  right  most  of  the  time  on 
the  great  issues  of  life?  Has  he  a  certain  elemental,  an 
almost  uncanny  wisdom?  When  so  much  as  during  the 
development  of  the  United  States  was  there  an  equal 
demand  for  these  qualities?  Where  was  there  such  an 
opportunity?  And  who  more  than  the  Scot  ever  so  com- 
pletely met  opportunity? 

You  will  recall  the  words  of  Sir  Walter  in  "Marmion" 

"Still  from  the  sire  the  son  shall  hear 
Of  the  stern  strife,  and  carnage  drear, 

Of  Flodden's  fatal  field, 
When  shivered  was  fair  Scotland's  spear, 

And  broken  was  her  shield!" 

Scotland  lost  her  separate  nationality  not  at  Flodden  or 
Culloden,  or  Marston  Moor,  or  Dunbar,  but  when  James 
VI.  of  Scotland  became  James  I.  of  England.  But  her 
spear  was  never  shivered.  The  Norman  overcame  the 
Saxon  in  1066,  but  that  merely  created  the  opportunity 
for  the  Saxon's  finer  and  larger  ultimate  supremacy. 
Cromwell  subjugated  both  Ireland  and  Scotland,  so  far 
as  a  country  can  be  subjugated  by  force  of  arms ;  and  to 
make  the  conquest  of  Ireland  complete,  he  colonized 
Scotchmen  in  the  Green  Isle.  He  thus  produced  a  mixed 
race  more  formidable  than  either,  and  from  these  Scotch- 
Irish  a  goodly  admixture  of  the  early  American  immi- 
grants came.  When  the  Scotchman  comes  as  a  pure  Scot 
he  is  dangerous;  but  when  he  comes  crossed  with  the  Irish 
he  is  terrible  and  invincible. 

And  yet  while  the  Scot  has  found  here  for  himself 
and  his  kin  that  which  answers  to  the  Poet  and  the  Jacob- 


"The  Land  We  Live  In"  419 

ite  in  him,  that  which  gives  large  opportunity  and  golden 
reward  to  his  trained  faculties,  his  racial  wisdom,  and  his 
indomitable  courage,  he  still  calls  it  "The  Land  We 
Live  In". 

Dr.  Holmes  wrote  once  of  the  man  who  dared  not  be 
as  funny  as  he  could.  If  this  toast  with  its  spirit  of  re- 
pression indicates  that  the  Scot  has  not  done  all  that  he 
could  because  he  dare  not,  then  under  the  spur  of  his 
inerrant  logic,  he  will  change  the  toast  whenever  he  really 
lets  himself  go,  and  I  can  imagine  some  other  descendant 
of  the  Puritans  standing  in  my  place  at  some  future  anni- 
versary of  this  Society  and  responding — not  to 

"The  Land  We  Live  in" 
but  to 

"The   Land   We   Own". 

If  the  American  that  is  to  be,  the  citizen  produced  by 
this  world-sifting,  the  ultimate  product  of  the  Melting 
Pot,  is  finally  more  Scot  than  Englishman,  more  Scot 
than  Puritan,  more  Scot  than  Jew,  more  Scot  than  Latin, 
it  is  certain  that  he  will  also  be  more  American  than  Scot. 
He  will  thoroughly  understand  why  that  Irish  lad  who 
was  found  dead  on  the  slopes  of  Missionary  Ridge,  had 
a  sprig  of  green  pinned  to  the  breast  of  his  blue  coat. 
He  will  cherish  the  heroic  memories  of  all  his  sires,  he 
will  honor  their  traditions,  he  will  sing  their  songs.  He 
will  then  have  reversed  the  suggestion  of  this  toast. 
Through  his  traditions  and  folk  songs  and  folk  lore,  all 
lands  will  live  in  him.  I  respectfully  suggest,  Mr.  Presi- 
dent, that  at  the  next  Dinner  of  this  ancient  Society  this 
toast  be  modified  and  that  my  immediate  successor  re- 
spond, not  to 

"The  Land  We  Live  In", 
but  to 

"The  Lands  That  Live  In  Us". 


THE  FOREFATHERS  AND  THE 
AMERICAN  IDEA 


AN  AFTEK  DINNER  RESPONSE  DELIVERED  ON  FOREFATHERS'  DAY  BEFORE  THE  NEW 

ENGLAND  SOCIETY  IN  THE  CITY  OF  NEW  YORK,  WALDORF-ASTORIA, 

THURSDAY  EVENING,  DECEMBER  22,  1910 


[OST  of  us  who  trace  our  lineage  directly 
or  indirectly  to  New  England,  in  study- 
ing the  Puritan  and  in  estimating  what 
he  did,  have  adopted  a  mental  attitude 
which  approaches  hero  worship.  The 
figures  of  the  Forefathers  loom  gigan- 
tically; they  move  across  the  perspective 
of  our  historical  knowledge  no  whit  less 
indomitable  and  heroic  than  the  figures 
of  mythology.  A  proper  mental  attitude  toward  progeni- 
tors is  commendable.  Our  reverential  attitude  toward  the 
Forefathers  may  well  be  studied  by  future  generations. 
We  have  assumed  it,  however,  not  for  the  purpose  of  in- 
structing our  descendants,  not  at  all:  it  is  just  a  spon- 
taneous expression  of  the  natural  humility  of  the  present 
generation.  Hitherto  our  nearness  to  Puritan  times  has 
explained  any  really  faulty  conclusions  that  we  may  have 
reached.  Studying  the  Puritan  critically  has  not  been 


4*20 


The  Forefathers  and  the  American  Idea         421 

unlike  estimating  the  height  and  linear  dimensions  of  a 
great  mountain  peak  when  near  to  it. 

We  have  been  disposed  to  credit  the  Puritan  with  all 
manner  of  virtues  and  to  charge  him  with  no  wickedness 
and  little  error.  This  mental  slant  has  flattered  our 
family  pride,  and  has  sometimes  helped  the  genealogists 
over  doubtful  places  in  our  family  histories.  But  the 
facts  hardly  warrant  such  flattering  conclusions. 

The  unadorned  truth  concerning  the  Puritan  shocks 
us  at  first.  As  we  investigate,  analyze  impressions  derived 
in  part  from  history  and  in  part  from  tradition  and 
legend,  we  rub  our  eyes  in  amazement.  The  greatness 
of  our  progenitors  is  not  finally  diminished  because  we 
are  shocked;  but  our  own  self-complacence  immediately 
becomes  less  aggressive.  I  conclude  that  a  sort  of  sub- 
conscious appreciation  of  the  truth  explains  the  fact  that 
the  Puritan  face — that  transcendental  aspect — which  still 
lingers  in  Boston,  comes  off  in  New  York. 

It  has  never  been  difficult  to  understand  the  Pilgrims. 
They  were  very  human  men.  They  loom  large,  but  their 
aspect  is  always  kindly.  They  were  the  product  of 
violence,  but  they  were  themselves  always  gentle.  They 
never  take  us  to  the  battle-fields  of  human  passions. 
They  were  prophets  and  evangels ;  they  had  from  the  be- 
ginning a  fairly  clear  grasp  of  a  great  idea,  but  they  did 
not  have  the  force,  the  driving  power,  to  establish  it. 
They  were  the  social  theorists  of  their  day. 

But  understanding  the  Puritans  has  not  been  so  easy. 
To  perpetrate  an  Irishism,  no  one  could  ever  get  very 
near  to  them  except  at  a  distance. 

Now  one  hundred  and  thirty-five  years  lie  between  us 
and  the  close  of  the  Puritan  Era.  This  gives  us  perspec- 
tive. Being  so  far  away  we  are  beginning  to  get  nearer 
to  the  Puritan;  we  are  beginning  to  understand  him. 
The  Pilgrim  was  a  Puritan,  but  mentally  as  unlike  his 


422  Other  Addresses 

brother  who  came  to  Massachusetts  Bay  as  charity  is 
unlike  bigotry.  After  he  separated  from  his  Puritan 
brothers  in  Scrooby,  the  Pilgrim  lived  amongst  the 
Dutch.  How  much  of  his  broad  tolerance  was  imbibed 
from  those  consistent  and  sturdy  defenders  of  individual 
rights  has  been,  and  will  always  remain,  a  subject  of 
much  speculation.  Just  why  he  left  Holland,  where  he 
had  found  full  tolerance  of  his  peculiar  views,  is  also  a 
question;  but,  as  the  Pilgrim  had  to  choose  either  a  home 
amid  the  terrors  of  a  savage  and  distant  wilderness,  or, 
as  an  alternative,  a  home  where  he  would  be  faced  with 
the  necessity  of  learning  and  speaking  the  Dutch  lan- 
guage, he  really  had  no  choice.  He  naturally  preferred 
the  wilderness. 

But,  some  one  says,  the  Puritan  did  have  the  America 
of  to-day  in  his  heart,  when  he  began  to  come  to  Salem 
and  Massachusetts  Bay;  he  did  foreshadow  the  great 
things  for  which  this  country  now  stands;  he  was  the 
prophet  whose  work  and  voice  told  of  the  coming  of  the 
great  Western  Republic.  Candidly,  I  can't  see  that  the 
Puritan  when  he  began  to  migrate  had,  consciously,  any- 
thing in  his  religion  or  ideas  of  government  or  plan  of 
society  which  to  any  appreciable  degree  foreshadowed 
what  was  to  happen.  The  institutional  forms  through 
which  what  we  may  call  the  American  Idea  has  chiefly 
expressed  itself  are : — 

1.  Pure  religious  liberty ; 

2.  An  asylum  for  the  oppressed  of  all  lands — except 
two  or  three ; 

3.  A  government  based  on  the  theory  that  all  power 
emanates  from  the  people. 

What  was  the  Puritan 's  attitude  toward  these  princi- 
ples ?  What  did  he  do  to  establish  them  ? 

He  was  not  merely  hostile  to  them:  he  was  their  en- 
emy, bitter,  implacable. 


The  Forefathers  and  the  American  Idea         423 

The  story  of  his  fight  against  religious  liberty  is  little 
short  of  amazing. 

(1)  We  have  credited  the  Puritan  with  an  intense 
love  of  liberty.  We  have  supposed,  some  of  us  at  least, 
that  he  abandoned  his  home  and  faced  the  terrors  of  a 
savage  country  at  the  other  end  of  the  world  because  he 
wanted  to  establish — away  from  the  corruption  of  the 
aristocracy  and  of  the  church — a  government  dedicated 
to  civil  and  religious  freedom.  What  are  the  facts? 
The  Puritan  believed  in  liberty — for  himself  and  for 
those  who  believed  exactly  as  he  did;  the  liberty  he  al- 
lowed to  others  was  the  liberty  to  keep  away  from  him 
and,  to  such  as  came,  to  be  gone  as  fast  and  as  far  as 
possible.  Separation  of  Church  and  State  was  farthest 
from  his  thoughts.  When  so  far  away  from  Church  and 
King  that  he  was  under  no  menace  and  could  express  his 
own  convictions  unafraid,  he  built  not  a  free  government 
but  a  theocracy,  a  theocracy  which  in  its  bigotry,  its  de- 
nial of  the  right  of  private  judgment,  and  in  its  ruthless 
methods,  was  probably  never  surpassed.  He  not  only 
established  a  State  Church — he  made  the  State  subordi- 
nate to  the  Church:  in  Massachusetts  he  made  Congrega- 
tionalism statute  law,  and  the  dissenter  a  malefactor;  in 
New  Haven  he  "bettered  the  instruction"  of  a  states- 
man of  our  own  day  who  only  re-discovered  the  Ten  Com- 
mandments— the  Puritan  re-enacted  both  the  Command- 
ments and  the  Mosaic  Code. 

Early  in  the  existence  of  his  theocracies,  the  Puritan 
came  into  direct  conflict  with  the  one  great  Prophet  who 
carried  America  in  his  mind  and  heart,  as  the  acorn 
carries  the  great  oak.  Roger  Williams  alone,  of  all  the 
men  of  his  time,  and  in  contrast  with  all  the  philosophers, 
statesmen  and  churchmen  who  preceded  him  for  more 
than  a  thousand  years,  had  a  theory  of  the  relations  of 
Church  and  State,  a  program  of  individual  rights  which 


424  Other  Addresses 

directly  foreshadowed  our  Federal  Constitution.  The 
charter  which  he  finally  obtained  for  Rhode  Island  in 
1663,  not  only  established  the  first  government  in  the 
history  of  the  world  that  was  thoroughly  free,  but  it 
furnished  the  only  form  of  government  existing  at  the  close 
of  the  Revolution  which  found  itself  in  no  material  con- 
flict with  the  Constitution  of  1787. 

With  him,  and  because  of  his  ideas,  the  Puritans  dif- 
fered bitterly.  To  them  he  was  no  better  than  the  an- 
archist seems  to  us.  So  they  drove  him  out,  banished 
him,  and  later  on,  when  the  New  England  Confederacy 
was  formed,  Rhode  Island  was  barred  out,  left  defense- 
less to  the  tender  mercies  of  the  Indians,  because  of  its 
perniciously  liberal  characteristics.  Then,  too,  the  Puri- 
tan mercilessly  persecuted  that  gentle,  noble  and,  it  must 
be  confessed,  at  times,  pestiferous  sect  known  as  Quakers, 
barbarously  maltreating  many  and  hanging  a  few,  in- 
cluding one  woman.  Later  on  he  found  it  necessary  in 
support  of  his  ideas  to  fine,  whip  and  jail  Baptists  just 
because  they  were  Baptists.* 


•These  are  some  of  the  penalties  prescribed  by  the  early  laws  of 
Massachusetts:  For  holding  religious  service  using  the  Prayer  Book — 
banishment.  The  same  for  denying  the  immortality  of  the  soul,  the 
resurrection,  sin  in  the  regenerate,  the  need  of  repentance,  the  re- 
demption and  justification  through  Christ,  morality  of  the  fourth  com- 
mandment, the  baptism  of  infants  or  for  departing  the  service  during 
the  latter  ceremony.  For  denying  any  of  the  books  of  the  Bible — 
whipping,  fine  and  banishment,  in  turn.  For  denying  the  true  God — 
imprisonment,  pillory,  whipping,  boring  the  tongue  with  a  hot  iron, 
sitting  on  gallows  with  a  rope  about  the  neck,  at  the  discretion  of  the 
court.  For  being  a  Jesuit — banishment,  and  death  for  return. 

These  are  some  of  the  punishments  actually  inflicted.  For  calling 
a  justice  a  just-ass — fine  and  banishment  with  the  threat  of  death  for 
return  without  leave  of  the  Governor.  Banishment  of  Roger  Williams 
and  Mrs.  Anne  Hutchinson  and  her  brother-in-law  for  heresy.  Her  son 
and  son-in-law  were  imprisoned  for  expostulating  against  the  punish- 
ment inflicted  on  the  mother.  Dr.  Child  and  others  were  fined  for 
petitioning  for  leave  to  worship  with  Prayer  Book  and  to  be  relieved 
from  payment  of  rates  to  established  church.  Twenty-five  freemen 
fined  for  signing  appeal  in  above  case.  John  Clarke  and  Obadiah 
Holmes,  Baptists,  for  holding  religious  service  in  private  house — fined 


The  Forefathers  and  the  American  Idea         425 

His  meanest  and  most  indefensible  action  was  in  Mary- 
land. The  Puritan  went  there  in  considerable  numbers 
because — as  usual — he  was  having  trouble  with  his  own 
kin  elsewhere.  This  nominally  Catholic  colony  received 
him  with  open  arms  and  at  no  time  oppressed  him  in  his 
person  or  beliefs.  Catholic  Maryland,  under  Lord  Balti- 
more, was  only  slightly  less  enlightened  and  liberal  than 
Rhode  Island  itself.  All  this  the  Puritan  repaid  with 
lying  reports  to  the  home  government,  to  the  effect  that 
the  Catholics  were  oppressing  and  misusing  him,  and  at 
the  first  opportunity  he  treacherously  overthrew  the  gov- 
ernment of  his  benefactor  and  attempted  to  substitute  for 
the  liberal  laws  of  the  colony  others  hostile  to  the  Cath- 
olics. 

The  facts  attending  the  founding  of  all  the  Puritan 
colonies  except  Plymouth  and  Massachusetts  Bay  establish 
the  Puritan's  intolerance.  Substantially  every  new  col- 
ony was  founded  because  he  could  not  live  with  his  own 
people.  He  was  frequently  "an  undesirable  citizen" 
amongst  his  own  kin,  if  he  was  in  the  minority,  and  if 
he  was  in  the  majority  he  made  it  so  uncomfortable  for 
all  who  disagreed  with  him  that  many  of  them  gladly 
went  elsewhere.  Some  were  banished,  some  migrated 
because  the  Puritan  wasn't  strict  enough,  others  because 
he  was  too  strict. 

(2)  That  the  Colonies  should  become  a  refuge  for  the 
oppressed  of  all  lands  was  not  the  Puritan's  plan.  He 


and  imprisonment  till  fine  was  paid  or  be  whipped.  Clarke  paid  fine 
and  Holmes  was  whipped.  Clarke  was  afterward  associated  with 
Roger  Williams  in  obtaining  the  Rhode  Island  Charter  of  1663. 
Quakers  were  to  be  imprisoned,  whipped  with  twenty  stripes  and  kept 
at  work  until  banished,  and  put  to  death  if  they  returned.  Ship- 
masters bringing  them  in  were  to  be  fined  £100  and  any  person  enter- 
taining or  concealing  them  to  be  fined  forty  shillings  for  each  hour 
of  entertainment.  Under  these  laws  William  Robinson,  Marmaduke 
Stevenson,  William  Leddra  and  Mary  Dyer  were  put  to  death;  others 
suffered  the  lesser  penalties. 


426  Other  Addresses 

discouraged  immigration,  indeed  was  directly  hostile  to 
it.  He  wanted  his  little  theocracies  all  to  himself. 

(3)  That  all  power  emanates  from  the  people  he  de- 
nied emphatically.  He  found  in  his  own  interpretation 
of  the  Scriptures  the  source  of  all  authority.  Hence  his 
ideal  government  was  a  theocracy. 

The  Puritan  was  bigoted,  unsympathetic,  harsh — even 
cruel,  but  he  believed  in  his  right  to  govern  himself  and 
to  worship  God  as  he  saw  fit — and  incidentally  to  make 
everybody  else  do  as  he  did.  But  this  was  really  incidental. 
Tha  great  thing  about  the  Puritan— the  thing  that  made 
him  a  beneficent  and  lasting  power  in  the  world — was  his 
intense  belief  in  his  individual  responsibility,  the  assertion 
of  his  individuality. 

But  of  this  and  its  significance  he  was  almost  wholly 
unconscious.  He  did  not  realize  the  prophecy  that  lay  in 
a  world  large  enough  to  welcome  all  convictions  and  too 
large  for  bigotry.  The  vast  reaches  of  America  were 
voices  of  Destiny  calling  on  men  to  found  societies  ex- 
pressive of  their  individual  ideas  of  religion  and  of  life. 
The  Puritan 's  sense  of  individual  responsibility,  otherwise 
known  as  the  '  *  New  England  conscience ' ',  gave  strangely 
contrasting  answers  to  that  call.  The  Pilgrims,  gentle 
and  just,  founded  Plymouth.  Puritan  Massachusetts  Bay, 
stern  and  intolerant,  ranged  itself  alongside.  Revolting 
from  the  bigotry  and  cruelty  of  Massachusetts  Bay, 
Hooker  founded  Hartford.*  Impatient  because  Massachu- 
setts Bay  was  not  sufficiently  rigidt  and  intolerant,  Daven- 

*In  Connecticut,  while  the  franchise  was  never  restricted  to 
church  members,  public  worship  except  of  the  Congregational  Church 
was  not  lawful  until  1669;  and  then  only  on  application  to,  and  ap- 
proval by  the  general  court;  dissenters  were  relieved  from  paying 
rates  to  the  established  church  gradually,  beginning  with  the  Episco- 
palians in  1727;  not  until  1784  was  a  general  law  enacted  exempting 
all  dissenters  from  the  payment  of  such  rates,  and  persons  without 
church  affiliations  were  not  exempt  until  1818. 

fin    Massachusetts    none    but    members    of    the    Congregational 


The  Forefathers  and  the  American  Idea         427 

port  founded  New  Haven.  Dissatisfied  with  its  liberal 
laws  when  New  Haven  became  a  part  of  Connecticut,  a 
little  band  of  fanatics  led  a  new  migration  and  founded 
the  sternest  and  strictest  of  all  theocracies  styled  a  ''New 
Ark*'.  (By  that  name  and  especially  by  that  fame,  the 
modern  city  of  Newark  would  have  difficulty  in  recog- 
nizing itself.)  Rejecting  the  harshness,  the  cruelty,  the 
intolerance  of  individual  judgment,  and  the  union  of 
Church  and  State  which  was  written  into  the  laws  of  all 
the  Colonies,  Puritan  and  non-Puritan,  Williams  founded 
Rhode  Island  and  made  it  the  refuge  of  all  who  suffered 
persecution  elsewhere.  From  societies  so  variously 
founded  to  a  general  society  planned  to  insure  liberty  of 
conscience  and  the  inalienable  rights  of  the  individual, 
was  an  inevitable  step.  And  it  was  the  great  step. 

Notwithstanding  his  theocratic  methods,  the  Puritan 
was  unconsciously  preparing  for  that  step  throughout  the 
whole  period  of  his  dominance.  Each  colony  was  in 
reality  and  separately  a  rebel  and  it  was  certain  that 
sooner  or  later  all  would  be  rebels  together.  When  revolt 
came  and  was  successful,  united  action,  compromise — 
compromise  which,  putting  aside  non-essentials,  centers 
around  and  establishes  great  principles  held  in  common, 
became  a  necessity,  a  matter  of  life  or  death,  of  order  or 
anarchy.  Compromise  led  first  to  that  halting,  illogical, 
impotent  half-way  experiment  known  as  the  Confedera- 
tion of  1781,  and  finally  and  inevitably  to  the  Federal 
Union. 

In  most  of  his  conscious  purposes  the  Puritan  was 
wrong.  In  his  unconscious  purposes,  in  the  power  of  the 
basic  principle  for  which  he  stood,  but  did  not  compre- 

Church  could  vote  until  1665;  no  other  form  of  religious  service  was 
lawful  until  the  old  charter  was  annulled  and  a  new  charter  granted 
toy  William  and  Mary,  in  1691;  every  property  holder  was  taxed  for 
the  support  of  the  Congregational  Church  until  1727;  and  every  one 
without  church  affiliation  was  so  taxed  until  1833. 


428  Other  Addresses 

hend,  in  his  efficiency  and  intensity,  his  integrity,  personal 
purity  and  wholesome-mindedness,  and  especially  in  his 
repudiation  of  all  civil  and  spiritual  overlords,  he  was 
right  and  great. 

One  of  our  distinguished*  educators,  a  thinker  and  a 
statesman,  lately  said:  " America  is  not  merely  a  geo- 
graphical division  of  the  earth,  a  union  between  states, 
a  body  of  cities  and  towns;  it  is  an  idea,  an  ideal,  a 
vision. ' '  America  was  barely  a  vision  for  many  centuries ; 
but  the  America  of  to-day,  with  all  its  faults,  is  a  nobler, 
statelier  structure  than  any  that  lifted  its  front  in  the 
dreams  of  the  early  lovers  of  liberty.  America  was  once 
an  idea  only ;  but  that  idea  is  now  a  reality,  and  to  nearly 
one  hundred  millions  of  people  it  is  as  beautiful  as  his 
dream-Republic  was  to  Plato. 

Just  what  now  is  the  American  Idea? 

The  responsibility,  capacity,  surpassing  dignity,  instinct 
for  justice,  aye,  the  divinity  of  man,  of  the  individual,  is  the 
idea.  A  government  and  a  society  built  around  that  idea 
is  our  great  gift  to  mankind.  Toward  that  idea  humanity 
struggled  heroically,  stubbornly,  bitterly,  and  sometimes 
blindly,  for  nearly  fifteen  centuries.  In  the  one  hundred 
and  seventy  years  immediately  succeeding  the  landing  of 
the  Pilgrims,  the  idea  was  definitely  and  irrevocably 
merged  with  the  intuitions  of  our  people  and  placed  in 
our  fundamental  law. 

The  Emperor  Constantine,  who  was  more  than  four- 
teen centuries  in  advance  of  his  time,  first  proclaimed  the 
principle.  Roger  Williams,  who  was  nearly  two  centuries 
in  advance  of  his  time,  first  gave  it  voice  here.  Constan- 
tine lifted  a  torch  which  was  so  smothered  by  the  strug- 
gles of  the  succeeding  centuries  that  it  illuminated  almost 
no  man's  way.  Roger  Williams  lighted  a  flame  which  at 
times  burned  low  but  never  went  out,  and  finally  in  our 

"Honorable  Woodrow  Wilson. 


The  Forefathers  and  the  American  Idea         429 

Federal  Constitution  became  a  light  that  lighteth  the 
world. 

The  discoveries  of  the  fifteenth  and  sixteenth  centuries 
literally  made  a  new  heavens  and  a  new  earth.  The  May- 
flower laid  her  shining  path  for  the  land  of  the  NEW 
MAN.  This,  however,  the  Pilgrim  appreciated  very 
faintly,  the  Puritan  not  at  all. 

The  Puritan's  spiritual  intensity  and  individuality 
supplied  the  driving  power  which  the  Pilgrim  lacked. 
The  Pilgrim  opened  the  door  to  the  land  of  the  New  Man. 
The  Puritan  tried  to  close  the  door,  but  Destiny  held  it 
open.  The  oncoming  thousands,  whether  they  entered  the 
land  by  the  Pilgrim  gate  or  elsewhere,  caught  the  infec- 
tion. They  took  from  the  Puritan  not  his  theocracies  but 
his  conception  of  individual  responsibility.  Away  went 
the  external  forms  of  Puritanism.  Away  went  the  whole 
European  program  of  society.  In  came  the  New  Man,  and 
with  him  a  demand  for  the  Puritan  standards  of  conduct, 
standards  which  have  ultimately  controlled  the  public 
opinion  of  this  people  ever  since  we  became  a  nation, 
standards  under  which  alone  government  by  the  people 
can  endure.  Events  translated  the  bigotry  of  the  Puri- 
tan into  virtues:  it  was  first  translated  into  power;  it 
became  power  because  it  was  unselfish,  because  it  was 
born  of  conviction,  not  of  ambition.  Freed  from  theocratic 
limitations,  Puritan  bigotry  became  self-respect.  Self- 
respect  gave  form  and  substance  to  the  dreams  of  Roger 
Williams,  place  and  force  to  the  justice  and  gentleness  of 
the  Pilgrims,  and,  finally,  rekindled  the  torch  which  fell 
from  Constantine 's  hand. 

The  forefathers  taught  us  self-respect;  the  doctrine 
that  civic  salvation  comes  from  within  and  not  from  with- 
out. They  taught  us  disbelief  in  the  divine  right  of  kings, 
belief  wholly  in  the  divine  rights  of  man.  Therefore  they 
loom  gigantically;  they  dwell  in  our  Olympus:  Williams 


430  Other  Addresses 

and  Brewster  and  Bradford  and  Winthrop  and  Davenport 
and  Hooker  and  a  host  of  others  equally  worthy  and 
worthily  equal.  Their  influence  over  us  and  our  attitude 
toward  them  find  expression  and  interpretation  in  the 
words  of  an  unknown  poet,  who  says : 

"Oh  God  of  nature,  how  thy  kindness  keeps 
"Some  changeless  things  on  earth, 

'And  he  who  roams  far  off  and  toils  and  weeps 

'Comes  home  to  learn  their  worth. 

'Gay  visions  vanish,  worldly  schemes  may  fail, 
'Hope  prove  an  idle  dream, 
'But  still  the  blossoms  flourish  red  and  pale 
'Beside  my  native  stream." 


MATTHEW  HENRY  BUCKHAM: 
AN  APPRECIATION 


BEMABKR  BY  MB.  DARWIN  P.  KIKGBLKY  BEFOBK  THE  NEW  YOEK  ALVMNI  ASSOCIATION. 
CNIVKBSITY  OF  VEBMONT.    FEBBUABY  17,  19  il 


,N  THE  history  of  Vermont  as  a  rebellious 
and  unattached  territory,  and  in  her  his- 
tory as  an  independent  republic,  two 
men  stand  out  above  all  others:  Ira 
Allen,  the  founder  of  the  University  of 
Vermont,  and  his  brother  Ethan,  the 
almost  mythological  hero  of  the  New 
Hampshire  Grants.  In  the  history  of 
Vermont  as  a  State,  covering  nearly  one 
hundred  and  twenty  years,  many  men  stand  out,  but  in 
my  judgment  three  men  stand  pre-eminent:  Thos. 
Chittenden,  Justin  Swan  Morrill  and  Matthew  Henry 
Buckham. 

Governor  Chittenden 's  place  has  been  confirmed  and 
emphasized  by  the  final  arbiter  of  all  greatness,  the  pass- 
age of  time. 

Senator  Morriirs  fame  rests  on  foundations  as  broad 

431 


432  Other  Addresses 

as  the  nation  itself,  and  with  each  passing  year  he  is  in- 
creasingly recognized  as  having  been  one  of  the  creatively 
wise,  the  sanely  patriotic  statesmen  of  a  period  that  de- 
manded and  produced  giants. 

Matthew  Henry  Buckham's  right  to  rank  with  Chit- 
tenden  and  Morrill  will  not  be  instantly  recognized  or 
conceded  by  all,  not  even  by  all  Vennonters.  His  life  and 
work  were  not  the  kind  that  usually  or  indeed  often  com- 
mand quick  recognition.  He  was  not  the  political  head  of 
the  State ;  he  did  not  reach  nor  seem  to  care  to  reach  the 
popular  imagination.  He  did  not  stand  in  the  Senate 
House  and  battle  for  sound  money  and  the  nation's  credit. 
He  created  in  the  youth  of  the  State  the  sound  minds 
which  gave  political  leaders  sane  audiences.  He  moulded 
the  intellects  and  the  morals  which  lie  back  of  good  poli- 
tics. His  fame  will  rest  on  labors  as  undramatic  and  as 
vital  as  wholesome  food  and  pure  air.  Vermont  produces 
men.  Why?  The  life  work  of  President  Buckham  gives 
us  a  large  part  of  the  answer  to  that  question.  In  a  few 
words,  what  manner  of  man  was  he  ?  What  did  he  accom- 
plish ? 

First  of  all  he  was  a  scholar,  using  the  word  in  its 
finer  and — shall  I  say? — earlier  significance.  He  exhaled 
no  atmosphere  of  pedantry  or  bookishness.  His  scholar- 
ship found  expression  in  the  exquisite  refinement  of  his 
mind,  in  his  quick  and  broad  sympathies,  in  his  intel- 
lectual and  moral  standards.  Mere  learning — which  not 
infrequently  kills  the  spirit — he  cared  little  for.  He  was 
"orthodox"  mentally  and  spiritually,  but  as  applied  to 
him  the  word  loses  all  offense.  He  stood  by  his  standards, 
but  he  loved  the  truth  above  all  things  and  was  never 
afraid  to  follow  whithersoever  it  might  lead  him.  He 
loved  the  old  classical  college  training;  but  he  early  rec- 
ognized the  trend  of  modern  life  and  instead  of  opposing 
he  lead  it  in  the  recent  development  of  the  University. 


Matthew  Henry  Buckham:   An  Appreciation      433 

He  loved  the  standards  of  Congregationalism,  but  if  the 
Church  as  a  whole  had  met  the  discoveries  of  science  in 
the  spirit  that  actuated  him,  there  would  have  been  no 
conflict  between  Science  and  Religion. 

He  was  a  modest  man,  as  all  brave  men  are.  He  hated 
shams.  He  had  a  fine  sense  of  humor,  that  saving  grace. 
He  had  a  deep  pride  in  the  careers  and  work  of  the  men 
and  women  whose  lives  he  had  strongly  influenced.  But 
of  this,  one  got  only  flashes  now  and  then.  His  conscious- 
ness of  the  fact  that  he  had  profoundly  influenced  certain 
careers,  he  guarded  jealously.  But  here,  it  seems  to  me, 
was  his  highest  conscious  reward.  I  don't  believe  he  ever 
thought  of  how  the  world  would  hold  him  after  he  was 
gone.  He  was  a  shy  man.  This  quality  caused  him  not 
infrequently  to  be  misunderstood  by  the  students. 

At  thirty-nine — having  already  been  related  more  or 
less  closely  to  the  College  for  over  twenty  years — he  came 
to  the  Headship  of  the  University  of  Vermont.  He  found 
it  almost  penniless;  he  left  it  after  forty  years  with  an 
annual  income  which  represents  an  invested  value  ag- 
gregating well  over  $4,000,000.  He  found  it  almost  with- 
out buildings;  he  left  it  architecturally  surpassed  by  few 
New  England  seats  of  learning,  if  indeed  it  is  surpassed 
by  any.  He  found  it  almost  without  students;  he  left  it 
with  a  body  of  undergraduates  two-thirds  as  large  as  that 
of  Yale  University  when  he  began  his  Presidency  in  1871. 
He  found  it  without  distinct  standing  in  Vermont;  he 
left  it  the  leading  institution  of  the  State.  He  found  it 
a  struggling  College;  he  laid  the  foundations  and  built 
some  of  the  superstructure  of  a  real  University. 

For  forty  years  he  moulded  the  character  of  Burling- 
ton and  of  the  State.  He  went  about  it  so  quietly  that  few 
realized  his  power.  He  set  a  standard  of  public  speaking 
and  of  writing  that  few  College  Presidents  have  ever 
reached — standards  by  which  all  his  successors  will  be 


434  Other  Addresses 

measured.  He  toiled  and  struggled  and  hoped.  His  toil 
bore  fruit;  his  struggles  triumphed;  his  hopes  came  to  be 
realized. 

He  saw  the  College  transformed — in  its  equipment, 
in  its  courses,  in  its  endowment.  He  lived  to  see  the  com- 
pletion of  the  first  great  step  toward  an  adequate  endow- 
ment. 

Chittenden  needs  no  monument,  neither  does  Morrill, 
and  I  add  neither  does  President  Buckham.  The  Univer- 
sity is  his  monument.  The  greater  we  make  that,  the  surer 
and  larger  his  fame.  The  University  of  Vermont  can  no 
more  be  separated  at  any  time  from  the  life  and  labors  of 
Matthew  Henry  Buckham,  than  the  State  of  Vermont  can 
be  separated  from  the  labors  of  Chittenden.  His  place  in 
its  history  is  as  fixed  as  are  the  outlines  of  Mansfield  in 
the  exquisite  panorama  which  has  daily  changed  its  pic- 
tures and  shifted  its  scenery  before  the  eyes  of  a  century 
of  successive  classes. 

If  I  may  so  speak  without  being  misunderstood,  Presi- 
dent Buckham  lived  too  much  the  life  of  the  spirit.  His  spir- 
ituality, intellectual  refinement,  sensitiveness  and  modesty 
denied  him  a  kind  of  success  as  an  administrator  which 
the  world  rates  high;  but  that  success — if  he  had  achieved 
it — would  not  be  dearer  to  some  of  us  than  our  memories 
of  President  Buckham  as  he  was. 

It  was  his  habit  (through  occasional  correspondence) 
to  give  some  of  "his  boys"  fugitive  glimpses  of  the  deep 
affections  he  cherished.  If  he  found  a  bit  of  fine  poetry  in 
a  current  magazine  or  review,  he  would  clip  it  out  and 
send  it.  The  poems  that  came  to  me  always  expressed  the 
attitude  of  the  spiritually-minded  man  toward  the  scenes 
and  loves  of  earlier  days.  Some  years  ago  he  sent  me  and 
told  me  to  keep  a  little  poem  entitled  "*An  Old  Virgil". 


*W.  H.  Savile— The  Spectator. 


Matthew  Henry  Buckham:   An  Appreciation      435 

A  quarter  of  a  century  had  passed  since  I  left  the  Univer- 
sity. More  than  a  half  century  had  passed  since  he  had, 
as  a  college  student,  laid  aside  his  Aeneid.  But  if  anyone 
questions  whether  he  cherished,  almost  sentimentally,  the 
spirit  of  his  youth  or  that  he  kept  the  fires  of  affection 
always  burning,  let  him  listen  : 

"A  faded,  shabby  little  book, 

Besmeared  with  many  an  inky  stain, 
Down  from  my  silent  shelves  I  took, 

And  turned  the  well-worn  leaves  again. 
Not  dearer  to  the  scholar's  heart 

His  tomes  of  vellum  and  of  gold 
Than  this  which  has  become  a  part 

And  parcel  of  the  days  of  old. 

Around  each  page,  from  far  off  years, 
The  glamour  of  one's  boyhood  clings 

And  wakes  once  more  the  sense  of  tears, 
The  sadness  at  the  heart  of  things. 
******** 

We  saw  not  then  the  soul  that  lay 

Beneath  the  wistful,  tender  phrase, 
Nor  thought  how  there  would  come  a  day 

When  we  had  gone  our  different  ways 
When  that  sweet  charm,  that  magic  touch 

Would  pierce  the  heart  with  sudden  pain, 
And  makes  us  long — Ah  me!  how  much! — 

To  see  that  Form-room  once  again." 

Observation  teaches  me  that  many  students  did  not 
see  in  President  Buckham  "the  soul  that  lay  beneath  the 
wistful,  tender  phrase",  but  now  the  day  has  come,  we 
having  "gone  our  different  ways",  when  that  sweet  dig- 
nity which  marked  his  every  act  and  thought  rises  before 
us  to  "pierce  the  heart  with  sudden  pain". 

Whatever  of  the  great  prizes  of  life  any  of  us  may 
have  won,  or  may  hereafter  win,  there  will  always  rest  on 
the  shelves  of  memory  an  ink-stained  volume,  redolent  of 


436  Other  Addresses 

youth  whenever  we  tenderly  take  it  down,  recalling,  when 
its  leaves  are  turned,  that  gentle  yet  strong  figure  which 
has  indeed  now  become  "a  part  and  parcel  of  the  days  of 
old". 

A  college  or  university  training  is  a  succession  of  re- 
generations. President  Buckham  was  our  intellectual  and 
moral  father — the  head  of  those  re-generating  forces  which 
transform  and  re-transform,  awaken  and  re-awaken, 
mould  and  re-mould.  "A  part  and  parcel  of  the  days  of 
old"  he  is,  but  equally  a  part  and  parcel  of  us  as  we  are 
to-night.  So  by  the  law  of  the  limitless  sphere  in  which 
we  came  under  his  tutelage,  he  will  forever  remain  a  part 
and  parcel  of  the  University,  of  the  State  and  of  the 
scholar's  larger  world. 

He  sent  me  a  little  manuscript  poem  last  summer,  the 
authorship  of  which  he  did  not  know.  He  was  then  re- 
visiting the  scenes  of  his  childhood,  seeking  the  vigor  that 
did  not  return.  He  was  amid  scenes  which  had  power  to 
recreate  for  him  his  long-departed  youth.  This  poem  ex- 
presses his  emotions,  voices  his  affections  and  his  regret. 
It  told  and  tells  how  a  brave  man  can  face  the  tragedy  of 
age  with  the  songs  of  youth  on  his  lips. 

Sweet  tangled  banks  where  ox-eyed  daisies  grow 

And  scarlet  poppies  gleam; 
Sweet  changing  lights  that  ever  come  and  go 

Upon  the  quiet  stream! 
Once  more  I  see  the  flash  of  splendid  wings 

As  dragon  flies  flit  by; 
Once  more  for  me  the  small  sedge-warbler  sings 

Beneath  a  sapphire  sky. 
Once  more  I  feel  the  simple,  fresh  content 

I  found  in  stream  and  soil, 
When  golden  summers  slowly  came  and  went 

And  mine  was  all  their  spoil. 

The  spirit  of  these  lines  so  reflects  the  spirit  of  the 
man,  his  refinement,  his  fine  feeling,  that  we  may  well 


Matthew  Henry  Buckham:   An  Appreciation      437 

believe,  that  he,  having  passed  from  our  sight,  has 
indeed  found  those  "tangled  banks'*  where  "scarlet 
poppies  gleam ' ',  that  he  has  caught ' '  the  flash  of  splendid 
wings",  and  that  "beneath  a  sapphire  sky"  his  "golden 
summers"  live  again. 


CHARGE  TO  THE  PRESIDENT  OF  THE 
UNIVERSITY  OF  VERMONT 


OCTOBER  6,  1911 


HE  idea  for  which  we  are  Trustees  dates 
back  to  1777.  It  first  found  expression 
in  the  historic  instrument  then  adopted 
as  the  fundamental  law  of  sovereign  Ver- 
mont. It  was  born  of  great  men  and  its 
twin  was  the  deathless  declaration  of  the 
same  instrument  against  every  form  of 
human  slavery.  The  original  purpose  of 
the  founders  of  this  State  that  there 
should  be  a  University  of  Vermont,  was  lost  sight  of  in  the 
struggle  of  the  succeeding  fourteen  years.  Geography  as 
well  as  sovereignty  was  then  a  little  uncertain,  and  misled 
by  a  movement  which  promised  to  extend  the  boundaries  of 
Vermont  far  enough  to  the  eastward  to  include  Hanover 
and  Dartmouth  College,  valuable  lands  which  were  origin- 
ally designed  for  the  University  of  the  State  became  the 
property  of  the  great  institution  founded  by  Lord  Dart- 
mouth. In  the  Constitution  of  1791  provision  was  again 
made  for  a  State  University,  but  until  Ira  Allen  took 
the  initiative,  the  charter  granted  was  without  vitality. 


438 


Charge  to  President  of  the  University  of  Vermont  439 

Chiefly  because  of  his  generosity  and  faith,  the  University 
graduated  its  first  class  in  1804. 

Time  denies  even  an  outline  of  the  struggle  of  more  than 
a  century  which  followed.  It  has  been  of  the  kind  that  pro- 
duces high  thinking,  and  the  environment  has  been  such 
that  plain  living  was  always  necessary. 

To-day, — after  the  lapse  of  one  hundred  and  thirty-four 
years— we  proudly  salute  the  men  of  1777.  They  wrote 
into  the  fundamental  law  of  the  Republic  which  later  be- 
came Vermont,  the  order  that  the  University  of  Vermont 
should  be  created.  We  salute  them  proudly  because  we 
bring  evidence  that  their  ideals  have  been  honored,  their 
ambitions  realized.  The  University  planned  for  their 
liberty-loving  republic  is  now  a  reality,  an  institution 
greater  than  any  they  then  foresaw;  yes,  a  nobler  pile 
than  any  of  which  even  Ira  Allen  dreamed.  We  have  come, 
in  fact,  through  toil,  tribulation  and  solid  achievement,  to 
a  point  where  the  prestige  of  the  institution  is  such,  its 
prospects  such,  its  efficiency  such,  and  its  equipment  such, 
that  the  plans  of  the  men  of  1777  and  1791  are  not  merely 
realized,  they  are  glorified. 

Guy  Potter  Benton,  into  your  hands— in  so  far  as  we 
properly  may— we  place  this  noble  heritage.  We  charge 
you  with  the  task  of  using  it  to  mould  and  develop  the  man- 
ners and  morals  of  the  youth  of  this  State  and  of  sister 
States  and  to  inspire  their  minds.  It  incarnates  the  pro- 
found love  of  learning  which  possessed  the  souls  of  our 
fearless  forbears— men  who  loved  learning  as  they  loved 
liberty,  and  how  they  loved  liberty  Ticonderoga  tells  and 
Crown  Point  tells  and  Hubbardton  tells  and  Bennington 
tells.  It  embodies  the  dreams  of  Ira  Allen;  the  labors  of 
Daniel  C.  Saunders,  Joseph  Torrey,  John  Wheeler, 
McKendree  Petty,  Wyllis  Benedict,  James  B.  Angell,  and 
a  host  of  worthies  living  and  dead;  the  statesmanship  of 
Justin  S.  Morrill;  the  princely  munificence  of  John  P. 


440  Other  Addresses 

Howard,  Frederick  Billings  and  John  H.  Converse ;  and  the 
loyal  devotion  of  that  body  of  graduates  who  have  so 
generously  endowed  it.  And  finally  it  embodies  the  fine 
spirit,  the  lofty  ideals,  the  unmatched  service  of  Matthew 
Henry  Buckham.  We  commit  it  to  your  hands  with  confi- 
dence, confidence  born  of  the  knowledge  we  have  of  your 
labors  and  your  leadership. 

We  shall  not  qualify  that  confidence  by  extended 
monition.  Not,  therefore,  as  an  admonition,  but  as 
expression  of  our  own  hopes,  we  say: 

Serve  the  age,  but  lead  it.  Keep  in  touch  with  the  spirit 
of  the  times,  but  do  not  hesitate  to  repudiate  unsound  doc- 
trine, to  rebuke  unwise  tendencies. 

Beware  of  the  over-practical  spirit.  ''The  life  is  more 
than  meat,  and  the  body  is  more  than  raiment."  If 
any  will  take  the  so-called  short-cut  to  learning,  lead  them 
nevertheless.  But  fail  not  to  give  the  road  and  the  destina- 
tion correct  names.  Let  the  degrees  of  this  Institution  tell 
the  truth. 

Before  delivering  to  you  a  copy  of  the  charter,  and 
copies  of  national  and  state  legislation  modifying  it,  to- 
gether with  the  keys  and  seal  of  the  University  of  Vermont, 
I  will  ask  the  Governor  of  the  F1  lfe,  Hon.  John  Abner 
Mead,  to  administer  the  oath  of  of 

(Oath  admimst^  -ed). 


On  behalf  of  the  Trustees  of  the  University  of  Vermont 
and  State  Agricultural  College,  I  hand  you  a  copy  of  the 
charter  of  Nov.  3,  1791,  a  copy  of  the  Morrill  Act  of  1862, 
donating  public  lands  for  the  establishment  of  a  College  of 
Agriculture  and  the  Mechanic  Arts  in  each  State  and  Ter- 
ritory of  the  Union ;  a  copy  of  the  Act  of  Congress  passed 
in  1890,  supplementing  the  Act  of  1862,  and  establishing 


Charge  to  President  of  the  University  of  Vermont  441 

agricultural  experiment  stations ;  a  copy  of  the  Act  of  Ver- 
mont passed  in  1865  incorporating  the  University  of  Ver- 
mont and  State  Agricultural  College,  together  with  subse- 
quent RESOLVES  of  the  Legislature  of  this  State  relating 
thereto. 

I  also  hand  you  the  keys  of  the  several  buildings  in 
which  the  University  is  housed;  and,  as  final  evidence  of 
*•  ir  authority,  I  hand  you  the  seal  of  the  institution. 

You  have  now  taken  the  oath  of  office,  and  have  been 
v  .othed  with  the  symbols  of  your  authority — therefore, 
on  behalf  of  the  corporation,  I  now  declare  you,  Guy 
Potter  Benton,  to  have  been  duly  elected  and  installed, 
President  of  the  University  of  Vermont  and  State  Agri- 
cultural College. 


LOAN  DEPT. 


This  book  is  due  on  the  last  date  stamped  below,  or 

on  the  date  to  which  renewed. 
Renewed  books  are  subject  to  immediate  recall. 


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